Deutsche Telekom's recordbreaking bid for VoiceStream came under renewed attack from politicians and investors within hours of its confirmation yesterday.
The German company's shares fell 11 per cent amid widespread investor concern that its cashand-shares offer for the US mobile phone operator, worth $46.5 billion (€49.87 billion) last night, was too high.
Mr Ron Sommer, chairman of Deutsche Telekom, defended the deal, claiming it was impossible to break into the important US market for "bargain prices".
However, one telecoms banker who had previously worked for Deutsche Telekom, said: "Ron Sommer is putting his career on the line with this one.
"It's an extraordinary price to pay compared with other mobile operators in the US."
VoiceStream has been independent only since being spun off last year by Western Wireless, a company created in 1994 by the merger of General Cellular and Pacific Northwest Cellular.
Meanwhile, the US Senate is expected to consider legislation this week that could scupper the deal because of the German government's shareholding in Deutsche Telekom.
The politicians are opposed to the idea of a foreign government controlling strategically sensitive telecoms networks. The bill, which would ban any company that was more than 25 per cent owned by a foreign government from acquiring a US phone licence, was sent to the full Senate last week and could be put to the vote before Congress goes into recess on Friday.
This could spark an international trade war as many experts consider the bill to be a violation of the 1997 World Trade Organisation telecommunications agreement.
The European Commission is writing to Ms Charlene Barshefsky, the US Trade Representative, to say the European Union would withdraw from its commitments under the agreement if it became law.
In addition, Mr Yohei Kono, the Japanese foreign minister, met Ms Barshefsky to express his concerns over the proposed legislation.
Like Deutsche Telekom, of which the German government owns 58 per cent, the largest shareholder in Nippon Telegraph & Telephone is the Japanese government.
VoiceStream distributed information kits yesterday that included primers on how US law applies to foreign ownership of telecoms companies.
On Capitol Hill, the battle is expected to focus on Senator John McCain, chairman of the powerful commerce committee, and Senator Ernest Hollings, who introduced the original legislation last month.
