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VoiceStream misses mark
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February 14, 2001: 5:14 p.m. ET
Loss for 4Q 79 cents wider than expected; Deutsche deal looks shaky
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NEW YORK (CNNfn) - VoiceStream Wireless Corp. reported a fourth-quarter loss Wednesday much wider than analysts' expectations, on the heels of speculations the company's merger with Deutsche Telekom AG might not go through.
VoiceStream said it lost $809 million, or $3.49 per share, in the fourth quarter, much larger than its loss of $152 million, or $1.58 per share, in the year-ago period. Analysts surveyed by First Call expected the company to lose $2.70 per share.
Revenue for the quarter increased 303 percent to $503 million, compared with the same period a year ago. The company said it had about 3.9 million customers at the end of 2000.
The quarterly revenue fell about $70 million short of First Call consensus estimates.
"The merger with Deutsche Telekom will provide the operating capital to the business to ensure VoiceStream service can continue to be one of the most sought after services in telecommunications today," said John Stanton, chairman and CEO of VoiceStream Wireless, in a statement.
 But Deutsche Telekom AG's chief executive, Ron Sommer, was under mounting pressure to resign on Wednesday as the group's share plunge threatened to jeopardize its deal to take over VoiceStream.
The company dismissed as "without foundation" what dealers in London and Frankfurt said were widespread market rumors that its Sommer had already quit, as the group's shares dropped to a two-year low of  28.37.
Deutsche Telekom's (DT: Research, Estimates) weak share price could undermine Telekom's deal to acquire VoiceStream -- a takeover Sommer has said is his top priority and upon which he has staked his reputation.
Under the terms of the VoiceStream deal, shareholders in the U.S. company can seek a renegotiation if the value if Telekom stock averages less than 33 euros for seven days within the 15 trading days prior to closure of the deal.
The closure date has not yet been set.
VoiceStream agreed to be acquired by Deutsche Telekom last July in a deal then valued at $50.7 billion but which is now worth just under $30 billion. Investors are skeptical the deal will go through if VoiceStream (VSTR: Research, Estimates) seeks better terms.
"His position is in jeopardy," said Frankfurt Trust fund manager Josef Scarfone. "The pressure is growing ... Like with football, a new trainer could bring a new dynamic."
In addition to its earnings news, VoiceStream announced a deal with America Online to provide its customers with AOL's instant messaging, content through text messaging and VoiceStream's high speed ISP service.
AOL's parent, AOL Time Warner (AOL: Research, Estimates), is also the parent of CNNfn.com.
-- from staff and wire reports 
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