Deutsche Telekom and Voicestream Merger: Charting a New Regulatory Course

On July 24, 2000, the German telecommunications giant Deutsche Telekom AG (Deutche Telekom) agreed to purchase the Bellvue, Washington based VoiceStream Wireless Corporation (VoiceStream) for over $50 billion. Although the merger may ultimately fall through, the response generated by the proposed merger indicates the future for deals between US and foreign-owned telecommunications companies. With the increasing globalization of the world's telecommunications markets, the Deutche Telekom deal represents the first time that a company dominated by a foreign government has attempted to purchase an American corporation. The signatories of the Basic Telecommunications Agreement, an agreement among World Trade Organization (WTO) members to open their telecom markets to foreign competition, are closely watching the US response.

The stance that the US government takes in reviewing this merger can be seen as a sign of things to come as the world's single largest telecommunications market opens up to the world.