Earlier this month, Deutsche Telekom rejected a $15 billion offer for a controlling 56.6% stake in T-Mobile US. The offer – which has been described as ‘inadequate’ and even ‘preposterous’ – was made by French telecom provider Iliad and was always unlikely to be accepted. T-Mobile is only too aware of its own value as the fourth largest mobile provider in the USA, especially after they revealed that profits had increased by more than a third in the quarter leading up to the bid in response to effective campaign strategy and marketing.
Deutsche Telekom has been trying to exit the US market for some time but is hoping for an offer that adds further value when compared to retaining their stake in T-Mobile US. Talks with Sprint, another highly successful US mobile provider (the third largest in the country) have also been called off after months of negotiation proved fruitless in the face of regulatory opposition. There was great enthusiasm for the deal from Softbank Corp (Sprint’s parent), who felt that acquisition of T-Mobile would enable them to take on the leading US wireless providers Verizon and AT&T.