Deutsche Telekom unimpressed by Iliad bid for US mobile unit -sources

* Iliad offers $15 bln for 56.6 pct of T-Mo, or $33/share

* Sprint bid at $40/share seen as more attractive-sources

* Iliad regulatory edge not enough to abandon Sprint-sources

* DT will examine both offers-sources

By Harro Ten Wolde and Philipp Halstrick

FRANKFURT, Aug 4 (Reuters) - Deutsche Telekom has serious doubts about the overall attractiveness of a bid by French telecom group Iliad for its U.S. mobile unit, despite lower regulatory hurdles than a rival offer, said two people close to the company.

Iliad made a surprise bid on Thursday for 56.6 percent of T-Mobile US, the fourth-largest carrier in the United States, at $33 per share, crashing deal talks between Deutsche Telekom and Sprint that have been going since last year.

"This offer is not serious enough to walk away from Sprint/Softbank," said one of the people.

"It is better to have a bird in the hand rather than two in the bush, but the question is at what price? And this discount compared to the Sprint/Softbank offer seems too high," the person said.

Sprint Corp, the third-place U.S. mobile carrier, has been planning an offer that values T-Mobile at roughly $40 per share, sources earlier told Reuters, though that bid is likely to face more regulatory challenges as it would whittle down the number of big players in the market to three from four.

The German operator has been looking for a way to exit the United States for more than three years because it sees T-Mobile's fourth-place position behind Verizon, AT&T, and Softbank's Sprint as limiting long-term profitability.

Although T-Mobile's aggressive challenger strategy has helped it win customers in recent quarters, Deutsche Telekom remains concerned that its lack of low-frequency spectrum and fixed-line infrastructure hampers its ability to compete.

Both sources said Deutsche Telekom Chief Executive Tim Hoettges does not see Iliad's bid as attractive because he is sceptical that it would be able to cut out $10 billion in costs from the business as promised.

Deutsche Telekom also doubts that T-Mobile under Iliad's ownership could mount a serious challenge to leaders AT&T and Verizon without additional spectrum and capital, said a third person briefed on the company's thinking.

In contrast, the German group has argued publicly that a tie-up with Sprint would create a number three player with large spectrum holdings and the critical mass to compete more effectively.

Such considerations matter because Deutsche Telekom, which owns 66.7 percent of T-Mobile, would retain a 29 percent stake in T-Mobile if it sells to Iliad, and a holding of about 15 percent in a combined Sprint T-Mobile, sources earlier said.

Deutsche Telekom will nevertheless look at both offers, said the two people.

SHAREHOLDERS WELCOME BID

Iliad has shaken up the French mobile and broadband market in the past decade with its cheap, pared-down subscriber plans and is now challenging Sprint, owned by Japan's Softbank Corp , for T-Mobile US.

Sprint has lined up financing for its bid and reached an agreement in June with Deutsche Telekom over a deal framework and valuation, sources earlier told Reuters.

Regulatory challenges remain the biggest hurdle facing the Sprint-T-Mobile deal since both the U.S. Federal Communications Commission (FCC) and Department of Justice (DOJ) have expressed a desire to have at least two more network operators competing against the market leaders AT&T and Verizon.

Iliad would not face a long antitrust review since it does not have U.S. holdings and the market would still have four main players, posing less of a risk of price rises.

Some Deutsche Telekom shareholders welcomed Iliad's arrival at the drawn-out T-Mobile talks.

"It is positive that more interest has emerged and Deutsche Telekom won't have to sell T-Mobile US at any price," said one top 10 shareholder.

A top 15 shareholder of Deutsche Telekom said the group should seek the best sale price by talking to both sides.

"The $33 offer is very low compared to $40, with the only justification that approval is much more likely," said the shareholder. "DT should talk to let as many potential buyers as possible compete on bidding.

"If Sprint wants exclusivity in the negotiations, then let them pay up for it," said the shareholder, adding this could come in the form of a higher break-up fee.

The two sides have already agreed that Sprint would pay Deutsche Telekom a break-up fee of $2 billion if regulators block the deal, sources told Reuters in June.

Iliad shares closed down 1 percent at 189.60 euros on Monday after a 7 percent slide on Friday. Deutsche Telekom closed down 1.7 percent to 11.88 euros, while T-Mobile US shares were up 0.7 percent to $33.5 at 1847 GMT.

(Additional reporting by Soyoung Kim in New York, Arno Schuetze in Frankfurt, and Leila Abboud in Paris; Writing by Leila Abboud; Editing by David Clarke)