After disrupting the French Internet and mobile market, Iliad proposes to acquire the American company to get a foot on this new continent.
The French ISP announced on July 31, it has placed a bid of $15 billion on T-Mobile for controlling 56.6% of the company, sold by Deutsche Telekom. It’s seems that, for the moment, Bouygues Telecom is no longer a target. This merger attempted comes after a supposed bid of Sprint, which proposes 40$/stocks instead of 33$ for Free.
In this case Free has strengths but also weaknesses.
The French ISP has a lower value ($16 billion) that his target $25 billion before the bid. Moreover the supposed offer of Sprint would be much higher. After the announcement, Free and all other French telecom companies felt in the stock exchanges.
However Xavier Niel said that huge Banks supported his approach, and it accepted to pass some alliances with other firms for carrying out this deal. The US mobile market knows less competition than in Europe, this is also the reason why Iliad have an advantage compared to Sprint. In fact, the Department of Justice and Federal Communications Commission (FCC) already blocked AT&T’s acquisition of T-Mobile, so again it should be the same with Sprint. Federal regulators could promote the French offer to keep a mobile telecom market with 4 actors, the last one controlled by a foreign company. Tom Wheeler is the current Chairman of the FCC, he says that a mobile market with 4 companies is good for american consumers.
Free and T-mobile a common DNA ?
Iliad and his target are number 4 on the telecom market, and so they seem to adopt the same strategy.
These 2 firms attempt to bring uncarrier principle, J. Legere, T-Mobile CEO, fights against two years contract. It also cut down prices, offering some unlimited plans and refunding taxes when new consumers leave their mobiles services provider and enter into a contract with T-mobile.
The CEO would like to compete with AT&T and Verizon giants: “The opportunity to bring Sprint and T-Mobile together, that’s one. But there are many different ways to do this, and we’ll consider all of them”, he said.
An unexpected support for Free comes from the French Economic minister on Twitter, Arnaud Montebourg; he congratulates Xavier Niel for attempting to conquer the US.
And what a surprise this wednesday 6th August,Sprint reportedly withdraws its bid to buy T-Mobile. But Deutsche Telekom also reported that he declines Free offer, because it’s too low, and so the french compagny need to find new investors to reinforce it.
Thomas BRODHAG
Etudiant en Master 2 Droit de l’Economie Numérique.
Je suis passionné de nouvelles technologies, du droit qui les
encadre et plus particulièrement par la propriété intellectuelle.
