Light Reading
Not taking Iliad's bid for T-Mobile US seriously? Think again.

Iliad's Bid for T-Mobile: This Ain't No Joke

Ray Le Maistre
8/12/2014
50%
50%

What a surreal few weeks for the US mobile sector. A French company lobs a low-ball bid for T-Mobile US Inc. across the Atlantic, Sprint Corp. (NYSE: S) withdraws from the race to buy its rival US wireless operator and names a new CEO, while T-Mobile's larger-than-life CEO engages in the sort of public name-calling more often associated with a school playground. (See Iliad Offers $15B for a Stake in T-Mobile, Sprint Drops Bid for T-Mobile – Reports , Hesse Out, Claure In: Sprint Is Son's House Now! and T-Mob's Legere Unleashed: 'Total Chaos at Sprint'.)

For some, the most bizarre part of this is the bid for a majority stake in T-Mobile US from French alternative operator Iliad (Euronext: ILD). It's very likely that, because Iliad is a largely unknown entity in the US, its takeover offer looks low, and its bid comes with an unexplained promise of $10 billion in synergies, that it will be seen as little more than a distraction, a joke.

That's the kind of reaction that met Iliad when it announced it would use the brand "Free" to unbundle access lines and offer its own triple-play services in France more than a decade ago. Not only that, the company decided it would build its own DSLAMs, rather than buy from the traditional broadband infrastructure vendors, as well as make its own customer premises equipment (set-top box and broadband router).

Crazy? It turned out to be inspired. The company was in control of its own service delivery platform, enabled service differentiation at the home by building boxes to its own specs and service strategy, and saved money in the process. It leveraged its lower opex to offer lower prices to customers, and the French lapped it up: The company quickly became the number two player in the French fixed broadband services market, adding tens of thousands of customers per week, offered its stock in an IPO, and started planning a fiber-based strategy, prompting gags (in the Light Reading European offices, at least) such as, "Iliad is going to offer fiber-to-the-Homer." (See Shares for Free! and Iliad Launches 1Gig Broadband in France.)

It then turned its attentions to the French mobile sector. By this time its rivals were certainly taking it very seriously, and rightly so. Iliad's mobile strategy decimated the incumbent players, forcing them into defensive and sometimes aggressive tactics as Free Mobile also caught the imagination of the French public. In fact, Iliad's mobile strategy has been so successful, it was a major catalyst for the current industry consolidation underway in France. (See Eurobites: Orange in French M&A Talks, Euronews: FT's Q1 Suffers Free Fall and Iliad Disrupts the French Mobile Scene.)

Today, Iliad has 5.7 million broadband customers, 8.6 million mobile customers, and an annualized revenues rate of €4 billion (US$5.35 billion).

The lesson to be learned here is that the Iliad team are not fly-by-night fools naively trying to punch above their weight. It may be small but it packs a very hard punch. And as fans of The Iliad would probably never say, the French upstart has a track record that suggests if it doesn't at first succeed with a bid, it will likely Troy, Troy again… (See Eurobites: Iliad Could Team Up for T-Mob Pursuit.)

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
8/12/2014 | 9:01:19 PM
Re: News, please?
Yep, great headline, and just maybe Iliad with those million of customers now may nust add a whole lot more, if things go as wished. I think that would really get the US providers in a real tizzie with the French coming aboard their ship.
ethertype
50%
50%
ethertype,
User Rank: Light Sabre
8/12/2014 | 2:16:16 PM
News, please?
Great click-bait headline!  "Ooh," the suckers exclaim, "there must be some new explanation for why Iliad buying T-mob all of a sudden makes sense!"

Nah, just kidding, says LR.  We don't have any actual news, just felt like talking about Iliad.  Thanks for stopping by to listen.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
8/12/2014 | 12:30:41 PM
It isn't over until we say it's over
Iliad CEO on perserverence: 

 

Educational Resources
sponsor supplied content
Educational Resources Archive
More Blogs from Shades of Ray
Corporate culture and the back office should be the first considerations for network operators with SDN and NFV aspirations.
European telco primed for unsolicited bids as its strategy falters.
I don't think there's another company like this in the communications industry…
Cloud asset M&A makes sense for telcos, but while it might make sense for Rackspace to be bought by an operator, does it have what CenturyLink really needs?
With the shadow of Apple's upcoming announcement hanging over them, mobile device vendors such as Samsung, Microsoft, Huawei and Motorola have been unveiling new devices.
Flash Poll
From The Founder
Is your network built on 'The Old IP,' or are you part of 'The New IP' revolution?
LRTV Huawei Video Resource Center
Innovating Access Technology With G.fast

10|1|14   |   3.42   |   (0) comments


Exploring the potential of G.fast technology from the point of view of the Broadband Forum, Huawei – and an end-user.
LRTV Documentaries
A Cultural Shift for an OTT World

9|26|14   |   01:41   |   (3) comments


Telcos need to embrace a new approach to partnerships if they are to generate extra revenues quickly and give customers what they want.
LRTV Documentaries
New Skills Needed as Telecom, IT Collide

9|26|14   |   4:07   |   (1) comment


As telecom and IT collide, new technologies are emerging, new skills are needed and new opportunities for women are arising.
UBB Forum News
Do IP Networks Need An Overhaul?

9|25|14   |   02:01   |   (0) comments


As traffic levels ramp, do IP networks need new technologies and topologies?
LRTV Documentaries
Sprint Wields Its Influence in the Valley

9|25|14   |   3:09   |   (11) comments


Anne-Louise Kardas, Sprint's connection to startups in the Valley, explains how telcos can be innovative and find new opportunities with partners.
LRTV Documentaries
SDN, NFV & The Future of XO's Network

9|25|14   |   3:47   |   (1) comment


XO Communications COO Don MacNeil explains how cloud, SDN and NFV are altering its network requirements as well as changing data centers of the future.
UBB Forum News
The OTT Conundrum

9|24|14   |   01:39   |   (0) comments


What is holding back prosperous partnerships between telcos and the OTT players?
LRTV Documentaries
Putting Broadband to Work

9|24|14   |   01:26   |   (0) comments


High-speed broadband network rollout is key to telco strategies, but it's what happens after the network is built that counts.
Light Reedy
Light Reading's Women in Telecom Recap

9|24|14   |   0:55   |   (4) comments


Our first Women in Telecom breakfast was a huge success, and we hope you'll join us in London for the next event on November 6.
UBB Forum News
Monetizing Ultra-Broadband

9|24|14   |   01:43   |   (2) comments


Ultra-broadband networks need to be built, with fiber-to-the-premises the ultimate goal, but they need to be monetized, too.
LRTV Huawei Video Resource Center
Sales Director of INIT on Plug & Play Switch Devices

9|19|14   |   3:21   |   (0) comments


INIT Italy uses both the Huawei S5700 and S7700 series switches for the campus LAN environment. Sales Director Andrea Curti says their company chose these Huawei devices over others because of their performance, flexible scalability and plug-and-play features.
LRTV Huawei Video Resource Center
Saudi Arabia Upgrades Vocational Training System

9|19|14   |   3:31   |   (0) comments


The Technical and Vocational Training Corporation (TVTC) has 100,000 students, 150 government-owned institutions and oversees 1000 private institutes. The CIO of TVTC explains that Huawei devices have allowed them to manage multiple datacenters using just one software program, scientifically tracking the progress of students and teachers, saving them millions.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Half of the world's population will be connected to the Internet by 2017, but not just by smartphones and desktops.
Hot Topics
Facebook Pokes Around LTE Direct
Sarah Reedy, Senior Editor, 9/25/2014
Is Redbox Instant Shutting Down?
Mari Silbey, Independent Technology Editor, 9/30/2014
Sprint Wields Its Influence in the Valley
Sarah Reedy, Senior Editor, 9/25/2014
US Ignite Cultivates Gigabit Apps
Jason Meyers, Senior Editor, Utility Communications/IoT, 9/25/2014
SoftBank Eyes a DreamWorks Buy – Report
Sarah Reedy, Senior Editor, 9/29/2014
Like Us on Facebook
Twitter Feed