Iliad Still In The Hunt For T-Mobile US

Iliad Still In The Hunt For T-Mobile US

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Last month T-Mobile received an $18 billion dollar offer to acquire 56% of the company, an offer made by the French telecom operator, Iliad. Iliad is an extremely interesting company, they’re very much a dot com company and are run by this incredibly creative maverick CEOXavierNiel who’s one of the five richest people in France. How Xavier began his journey adds an interesting twist as it was in the sex chat line industry on Minitel and now owns one of the largest telecom operators in France. Iliad provides low cost, high quality services to its customers and is very much an out of the box thinking telecom operator. With risqué advertisements to shock factor billboard ads, Iliad has done it all, and bringing that zing factor to the marketing division of T-Mobile could be the best thing for this company.

However, a lot of people have voiced criticism, claiming Iliad could be biting off more than it can chew. This is for several reasons, stemming from only having experience within the European market, and while that isn’t a bad thing due to T-Mobile’s German routes, it could be disastrous for the USA market to being a company that actually costs far less than T-Mobile. So from a purely financial perspective, several other deals on T-Mobile’s table look far more appealing and beneficial, as well as safer bets, to T-Mobile investors, than Iliad’s does. So a safe financial bet is something Iliad isn’t, which is why after having the initial offer declined, T-Mobile is now again, as of yesterday, entertaining Iliad’s proposal to bring on further potential backers with it in on the deal. What Iliad is proposing to do is broker a deal with other interested investors to form a possible $20 billion offer for the same 56% share in T-Mobile in an attempt to strengthen its position on the bidding table.

The issue though with other prime bidders is Softbank, who wants to merge Sprint with T-Mobile, something that could play to Iliad’s advantage for the basic reason that Iliad’s not going to merge 2 of the 4 largest US operators to form 3. They will instead work on expanding T-Mobile’s global reach. Sprint has another offer in the pipework as do other global telecom companies looking to expand both in the European market as well as break into the US markets, so Iliad has its work cut out for it.

With over six thousand employees and recorded revenue of a little over 3.7 billion Euros in 2013, the French telecom operator Iliad, also known in France as Free, still feels strongly that T-Mobile will consider its next bid. If all talks and bids fail with T-Mobile, Iliad’s most possible scenario will be to go back to talks with Bouygues, the number three mobile operator in France, even though past talks fell short due to price requests being too far apart.

Iliad has not yet mentioned how it’s going about signing up potential investors and backers for the T-Mobile deal, but one thing is for sure, Deutsche Telekom, who owns T-Mobile, is entertaining any and all serious bidders, including Iliad, in an attempt to exit the US market at a profit since competition with the likes of AT&T and Verizon has become fierce.