Iliad's purchase price is in the same territory as what Sprint is likely to offer, both being around the low $30 billion range, Entner said. Those numbers actually might not change much, but based on the greater risk in a Sprint deal, T-Mobile could command a much bigger breakup fee in case the government nixes the buyout. All indications are that T-Mobile has been looking to collect about $2 billion from Sprint if things go awry, but that could easily double with a less risky option like Iliad's on the table, Entner said.
Though a $4 billion breakup fee may not sound like much compared to a $30 billion buyout, it was just such a payout that helped put T-Mobile where it is today. AT&T gave T-Mobile $3 billion cash, a seven-year roaming deal and a bundle of spectrum licenses after the U.S. Federal Communications Commission and Justice Department blocked its attempt to buy the smaller carrier in 2011. That windfall contributed to T-Mobile's rollout of LTE.
"T-Mobile financed its network buildout through the spectrum and the money it got from AT&T," Entner said. That LTE expansion was key to making the underdog more credible against its larger rivals, paving the way for the successful challenges it's mounted since then.
On Thursday, T-Mobile reported a net gain of more than 1 million customers for the fifth quarter in a row, just a day after Sprint reported losing another 220,000 subscribers. Another consolation prize might make T-Mobile stronger yet again.
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