Deutsche Telekom rejects Iliad’s $15 billion offer for 56.6% of T-Mobile USA


You’ve probably heard that France’s Iliad has made a $15 billion offer to buy 56.6% of T-Mobile USA, which for those who count, is a 17% premium over T-Mobile’s Wednesday closing price.

Germans refused the deal as they’re looking for a) more money; or b) potentially even a better thing – to merge with Sprint and form the real competitor to AT&T and Verizon Wireless. However, I tend to think that Iliad’s entrance to the U.S. market would be awesome, to say the least.

Few years ago, Iliad — which BTW is the fourth largest mobile operator in France — has pretty much revolutionized the French ISP market, being the first company to offer a “triple play” service in the country through its self-produced singular Freebox set-top box.

In the mobile arena, it has managed to go from zero to more than 8.5 million customers in just two years, while capturing 12% of the market. Their secret of success? Simple (commitment-free) and affordable packages. It’s that easy, and just the kind of thing that Americans could need. T-Mobile has started something like that with its Uncarrier initiative, and Iliad could add even more fresh blood to the mix, and eventually reach more customers.

As I’m writing this, it’s still unclear whether Iliad will up its game and an additional billion (or so) to the offer… or give up. If they’re looking for “pure” growth — in terms of subscriber numbers — they’re better off turning to emerging markets. However, they apparently want to serve data hungry users from the Western world. And that comes with a hefty price tag. We’ll see where this goes next…

[Via: NYTimes]

  • PeterSteinbeck

    My friends in France love FREE (Iliad) and use it both for mobile and ISP.

  • gadget_hero

    I think its safer to say this is the thoughts going through DT’s mind A) we can’t actively court Iliad because if we do SoftBank’s deal will force us to pay them $1BN B) the government is probably going to NOT let the deal through and then we get $1BN from SoftBank C) Then we can easily sell to Iliad. On a side note all the fall starts in selling T-Mobile have yielded good profit.

  • qubius

    Yes, that is all good and well but all 38 of the counties that T- Mobile just add in the 700 MHz A block band has more buffalo then people. T-Mobile owns only 17 of the top 25 U.S. Metro markets. T-Mobile made a $3 billion dollar bet on the 700 MHz A block and is now pot committed and can’t afford to fold it’s hand so late in the game. T-Mobile should just bite the bullet and move all-in on and buy the rest of the top 50 U.S. metro markets. T-Mobile subscribers will switch back to Verizon and AT&T as fast as a few dropped calls and will never look back. Let us remember, T-Mobile has made it easy to switch because it’s customers are now contract free, thank you very much.

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