The U.S. telecom market is dominated by a couple of really big players. It is hard to imagine it otherwise, as long as developing a national infrastructure requires important resources. Sprint wants to increase its power in the U.S. market and discussions about a T-Mobile acquisition spread earlier this year. Just a couple of weeks ago, FCC announced an auction for low-spectrum frequencies in 2015. Sprint and T-Mobile were allegedly talking about making a common bid. French telecom company Iliad might get in the way. The Sprint – T-Mobile merger had advantages which seemed two-folded. On one side the companies would definitely profit from increased coverage. Secondly, the FCC needs plenty of time to analyze the procedures, so the sooner the announcement is made, the better.
But another company announced an interest in T-Mobile. Iliad is a French telecommunication company founded in 1999. The company offered today $15 billion to purchase over half of T-Mobile. By paying $33 per share, Iliad wants to buy 56.6 percent of the American company. The rest of T-Mobile’s shares are valued at $40.5 to the benefit of U.S. shareholders, according to Reuters.
French telecom company Iliad wants to benefit from a one-time opportunity
French telecom company Iliad wants to enter the largest telecom market and buying T-Mobile is a one-time opportunity for the French company. Iliad sees a connection between the two telecom players, with both having similar histories. “The US mobile market is large and attractive,” Iliad said in a press release. “T-Mobile US has successfully established a disruptive position, which in many ways, is similar to the one Iliad has built in France.” Iliad seems quite confident that the transaction will be successful.
Usually the telecom national markets contain just a couple of players. When mergers or acquisitions take place, regulators must analyze the process to prevent antitrust issues. But as long as Iliad is not present on the U.S. market, this important lengthy step will be surpassed and the acquisition process will be completed sooner.
Probably T-Mobile’s owners could not be happier now that they are courted by two important telecom companies. Deutsche Telekom now owns 67 percent of T-Mobile and is willing to exit the U.S. market before a lockup expires in November. If Sprint and T-Mobile merge, they will be able to become competitive with AT&T and Verizon. But If French telecom company Iliad buys T-Mobile, the market will remain scattered. Will consumers benefit more if Iliad, instead of Sprint, will buy T-mobile?