Telecom Takeover

In Bid for T-Mobile USA, Billionaire Who Shook Up France's Mobile Market Turns Sights to United States

35848645 Xavier Niel
Xavier Niel, chief executive of Iliad, the French business bidding for T-Mobile USA.
  • Why it matters

    Why it matters

    Xavier Niel’s bid for T-Mobile USA could inject fresh energy and capital into a sluggish market dominated by Verizon Wireless and AT&T.

  • Facts

    Facts

    • Mr. Niel is bidding $15 billion for 56.6 percent of T-Mobile USA.
    • T-Mobile is the fourth largest mobile phone operator in the United States after Verizon, AT&T and Sprint.
    • Deutsche Telekom failed to sell T-Mobile to AT&T in 2011.
  • Audio

    Audio

  • Pdf

For almost two decades, Xavier Niel, an entrepreneur and leading counter-culture billionaire, has shaken up France’s staid mobile phone and Internet service market with relentless doses of ever-lower prices and generous customer service.

This week, Mr. Niel moved to apply his aggressive, low-cost strategy to what is becoming an increasingly borderless battle for the world’s mobile carriers, bidding $15 billion for 56.6 percent of T-Mobile USA, the struggling subsidiary owned by Deutsche Telekom.

Not only does Mr. Niel’s offer for T-Mobile USA, the No. 4 operator in the United States, have the potential to inject fresh energy and capital into a largely moribund market dominated by industry leaders Verizon Wireless and AT&T.

The purchase, if it is accepted by the German telecom company’s shareholders and survives political scrutiny in the United States, could harken a new round in a global scramble for wireless networks, the main way most people around the world now access the Internet.

The offer by Mr. Niel’s Paris-based Iliad holding company is vying with a reportedly $32 billion bid for T-Mobile USA from Sprint, the third-largest U.S. operator. While the Sprint bid —which would reduce the number of U.S. operators to three – faces potential antitrust hurdles, the French offer is seen as having a better chance of succeeding.

Investors, a day after Deutsche Telekom revealed Mr. Niel’s bid, appeared to agree. Shares of Iliad traded electronically in the United States rose 8 percent on Friday morning in Europe to $291.75.

Torsten Gerpott, a professor of management at the University of Duisburg, said U.S. regulators will be reluctant to scuttle Iliad’s bid for T-Mobile USA, fearing that such a rejection could worsen Washington’s already fragile relationship with France.

“Political relations between the United States and Europe are strained at the moment by the whole data security debate,’’ Mr. Gerpott said in an interview. “I seriously doubt that the United States will interfere … so as not to negatively affect relations further.”

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