Feature Article

July 31, 2014

France's Illiad Makes Surprise Bid for T-Mobile US

Illiad, the mobile service provider that has revolutionized the French mobile market, has made a bid to buy T-Mobile US, an unexpected move that might be a nightmare for the other U.S. mobile service providers.

The financials are not entirely clear, as Illiad is smaller than T-Mobile U.S. Also, the regulatory picture might not be so clear, either. Presumably, U.S. regulators would prefer a deal that preserves four national mobile service providers, and a successful Illiad bid would accomplish that objective.

The other issue is whether any Illiad bid would eventually include other strategic investors that would help make the numbers work.

In France, Illiad rapidly gained market share by slashing prices, and partly by relying on Wi-Fi access (“Wi-Fi First”) as a way of controlling its costs.

As T-Mobile U.S. already is the successful attacking carrier in the U.S. market, succeeding in large part because T-Mobile U.S. has slashed prices and radically simplified purchase decisions, T-Mobile U.S. already operates in the mode of Illiad’s Free Mobile operation in France.

Should the bid move further, and eventually succeed, another strategic option awaits, namely a business tie-up of some kind with Comcast, one might argue, as that would allow Illiad to leverage the Wi-Fi-first access model broadly across U.S. markets.

Edited by Adam Brandt

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