Bidding war could lead to consolidation in French mobile telecommunications

SFR is the subject of a merger proposal from rival operator Bouygues Telecom and a competing bid from ISP and cable TV operator Numéricable

French mobile operator SFR is the target of a bidding war between construction giant Bouygues, which hopes to merge the network with that of its own Bouygues Telecom subsidiary, and Altice, owner of French ISP and cable TV company Numéricable.

Late Wednesday, Bouygues offered to buy SFR from Vivendi for €10.5 billion (US$14.5 billion) and a 46 percent stake in the combined entity. It said its offer valued SFR at around €19 billion, taking into account the merger's value.

Altice, too, announced Wednesday that it had made an offer for a controlling stake in SFR, but did not provide details. Reports emerged last week that it planned to make a highly leveraged offer through its Numéricable subsidiary, prompting French government officials to express concern that the resulting heavily indebted company would be unable to invest in new technologies and network roll-out.

Vivendi confirmed it had received the offers, saying that its supervisory board would now study them, taking into consideration the best interests of its employees and shareholders.

If Bouygues were to win the bidding, the resulting merger would reduce the number of mobile networks in France to three, putting the combined entity ahead of current market leader Orange (formerly France Télécom) and of fledgling operator Free Mobile, which is building out its own 3G network around major cities, but is still largely dependent on a roaming agreement with Orange for nationwide coverage. Bouygues Telecom and SFR together would also become the country's second-largest ISP.

France is unusual among large European countries, in that it has only one truly international player, Orange, among its four mobile networks. Orange also has mobile networks in Spain, Poland and elsewhere, and retains a stake in its U.K. joint venture with Deutsche Telekom, EE (formerly Everything Everywhere).

Spain, on the other hand, not only has Orange, but also Telefónica, which has operations elsewhere, including Germany, Italy and the U.K., and a subsidiary of U.K. operator Vodafone, also present in Germany and Italy.

SFR was once part-owned by Vodafone, but the company eventually gave up its stake when Vivendi proved reluctant to sell. Vivendi is ready to get out of telecommunications, but SFR, its profitability depressed by the price war that followed the arrival of Free Mobile in early 2012, makes a less attractive target now. Teaming up with Bouygues Telecom may make it more interesting to international buyers.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsbusiness issuestelecommunicationorangeVivendiSFRBouygues TelecomBouyguesAlticeNuméricable

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Peter Sayer

Peter Sayer

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?