TELECOMS giant SFR – currently the second largest mobile operator in terms of French customers after Orange – has reportedly made an offer to buy competitor Bouygues Télécom for €10 billion.
That would move SFR into first place and leave the market with just three operators – SFR, Orange and Free, a change which the Economy Ministry is opposed to, however the ministry does not have a veto on the change.
Bouygues is expected to consider the offer, which comes from billionaire owner of SFR and Numéricable, Patrick Drahi, at a meeting tomorrow (Tuesday). It is only for the firm’s mobile telecoms arm, not its other operations (building, roads etc).
The amount is estimated to be about 25% more than what Bouygues Telecom is valued at on the markets – and Mr Drahi is even rumoured to be willing to go to €11 billion. The offer is reported to be backed up by loans from BNP Paribas.
According to BFMTV telecoms expert Frédéric Simottel the offer is “credible” and “everyone has been saying for more than two years now that the [French mobile market] needs to consolidate – overall four operators is one too many.”
Should the deal go through, the 11 million Bouygues Telecom clients are expected to move to SFR, however the practical result for customers currently on one of the various Bouygues contracts is not yet clear.
However Le Journal du dimanche, which broke the news, said the arrangement is that SFR should not take over all of Bouygues – for example it has negotiated with Free that a part of Bouygues’ transmitters, frequencies and shops would instead be passed on to Free.
Part of the interest for SFR, he said, is that today’s mobile market requires increasingly huge investments to keep up with demand, such as more and more use of mobiles for watching videos.
He said potential effects for customers are there will be fewer ‘price wars’ between operators and prices would ‘stabilise’ or perhaps become more expensive – we would not see more new cut-price offers as in recent years.
However he said the operators would be able to invest more and quality of service would increase, notably for watching videos.
France Info said: “[Economy Minister] Emmanuel Macron thinks it’s not the right time... The ministry is worried about investments, jobs and prices going up for customers. However the state is not a shareholder in either SFR or Bouygues Télécom and can’t oppose consolidation in the sector.”