Iliad’s surprise bid for T-Mobile would leave Sprint the least able to compete if wireless prices tumble, according to the “Strategy Analytics Wireless Operator Strategies (WOS)” service report (http://bit.ly/1kqfg6V).
While Strategy Analytics believes the bid will ultimately fail, it represents a wake-up call for all the carriers in the increasingly saturated market. Key findings from the report:
° Iliad’s Free has had a dramatic impact on the French market, driving a 29% decline in service revenue and 19% decline in EBITDA since its launch.
° Iliad’s founder, Xavier Niel, is also an investor in Israel’s Golan Telecom, who’s aggressive mobile launch two years’ ago has had an equally dramatic impact on the market.
° Despite good logic to a bid by an operator keen to play outside the contracting European market, Iliad is unlikely to have an appetite for a bidding war with Softbank.
“While T-Mobile’s UnCarrier strategy has elevated its market position, its Q2 performance trailed AT&T’s and its transformation has been more about offering customer choice and flexibility rather than lower prices,” says Susan Welsh de Grimaldo, director, Wireless Operator Strategies. “Iliad’s Free strategy is all about the price. Pushing multi-play bundles would be an obvious response for Verizon and AT&T to the Free approach, a strategy which has enjoyed some success in France, but that is currently not an option for Sprint.”