Free-T-Mobile: Disruptive Revolution or a Bridge Too Far?
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Free’s shock bid for T-Mobile USA will stretch its finances and management capacity to the limit. Can Free’s package of tactics, technology, and procedures work in the US context?
Description
Format: PDF file
Pages: 18 pages Charts: 9 Author: Alexander Harrowell Publication Date: August 2014Table of Contents
- Executive Summary
- Free’s Bid for T-Mobile USA
- T-Mobile: the state of play in Q2 2014
- Free-Mobile: the financials
- Indicators of a successful LBO
- fr: a modus operandi for disruption
- Surprise and audacity
- Simple products
- The technical edge
- Obstacles to the Free modus operandi
- Spectrum
- Fixed-mobile synergy
- Regulation
- Summary
- Two strategic options
- Hypothesis one: change the circumstances via a strategic deal with the cablecos
- Hypothesis two: 80s retro LBO
- Problems that bite whichever option is taken
- The other shareholders
- Free’s management capacity and experience
- Conclusion
Table of Figures
- Figure 1: Revenue and margins in the US. The duopoly is still very much with us
- Figure 2: Fully-developed disruption. Revenue and margins in France
- Figure 3: T-Mobile’s return to underlying profitability – caused by moderating its smartphone bonanza somewhat
- Figure 4: Postpaid ARPU falling steadily, while ABPU just about keeps up
- Figure 5: T-Mobile’s supposed “decoupling” of devices from service has extended $3.5bn of credit to its customers, rising at $1bn/quarter
- Figure 6: Free’s valuation of T-Mobile is at the top end of a rising trend
- Figure 7: Example LBO
- Figure 8: Free-T-Mobile in the context of notable leveraged buyouts
- Figure 9: Free Mobile’s progress towards profitability has been even more impressive than its subscriber growth
Technologies and industry terms referenced include: Acquisitions, Cable company, Consolidation, Disruption, EBITDA multiple, fibre, Fixed-mobile, free.fr, fttx, Future Networks, Iliad, Innovation, LBO, Leverage, Leveraged buy-out, mobile, Next Generation Network, NGN, Small cells, spectrum, Strategies, Strategy, T-Mobile USA, Telco 2.0, Telecom, Telecommunications, wireless