Iliad is apparently becoming known as a disruptive force in France for undercutting the competition on price, and it looks to be trying that same tactic with its offer for T-Mobile USA; the $15 billion offer is nearly $10 billion less than T-Mobile’s current market value.
And the Iliad offer is only half the size of the reported $30 billion deal that Sprint has been trying to hammer out with Deutsche Telekom for months.
While it’s unlikely that DT would ever accept such a low number, U.S. regulators would probably be much more willing to approve the sale of T-Mobile USA from one European company to another, rather than seeing the nation’s third- and fourth-largest wireless providers merge into a company that still wouldn’t come close to being able to compete with AT&T or Verizon.
After all, it wasn’t T-Mobile or AT&T that backed out of their attempted merger. It was both the FCC and the Justice Dept. who moved to block the deal, arguing that further consolidation of the U.S. wireless market would lead to higher prices and slowed innovation.
But regulators didn’t have much problem when Japanese telecom SoftBank became the majority owner of Sprint in 2013.
So perhaps an improved offer from Iliad or a reasonable bid from another European or Asian company would be enough to shake the idea of a Sprint merger.
T-Mobile has confirmed to the Wall Street Journal that it received the offer from Iliad, but isn’t saying anything else.