US telecoms market set for French invasion

Telecoms

by Michael Moore| 01 August 2014

Iliad’s $15bn bid for T-Mobile US could change everything.

One of the largest American mobile networks could soon be French-owned following a spectacular move from a company trying to shake up the marketplace.

French operator Iliad, better known for its Free brand, has made a $15bn (£11.9bn) takeover bid for T-Mobile US, a move which would mark its first expansion outside its home market.

The offer is equal to $33 a share, and would give Iliad control of 56.6% of T-Mobile's shares, with the bid funded by a combination of debt and internal resources, along with a €2 billion capital increase coming from within the company, founded by Le Monde co-owner Xavier Niel.

Iliad says it has also secured the support of international banks for the loans, and does not expect to encounter any regulatory problems with the acquisition, given that it currently has no presence in the US.

Neither Iliad or Deutsche Telekom, the parent company of T-Mobile, commented on the news.

Iliad gained much attention last year when it broke into the previously three-party French mobile market, undercutting the other companies to start a mobile, landline and broadband price war in the country.

Iliad said T-Mobile's 'unCarrier' strategy has many similarities to its own development in France, doing away with annual contracts (with T-Mobile even paying for switching fees), roaming costs, or upgrade charges.

The offer comes amid speculation that Deutsche Telekom is close to selling off its stake in T-Mobile US as part of a merger deal with fellow US network Sprint. Such a deal would combine the third and fourth largest US mobile operators, giving more competition to market leaders Verizon and AT&T.

 

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