Sale of SFR agreed in France: what changes for mobile and internet clients

An agreement to purchase SFR, which has 20-million plus customers, has been reached by France’s three other major telecom companies after months of negotiations. 

Bouygues Telecom, Iliad (operator of ‘Free’) and Orange intend to buy their rival for a combined sum of €20.35 billion, the groups announced in a joint statement on Saturday (June 6). 

The offer was submitted earlier this year after an initial bid of €17 billion was rejected and has been accepted.

Under the terms of the deal, SFR’s operations would be divided between the groups in the following way: 

• Bouygues, contributing 42% of the sale price, will inherit B2B operations (for professionals/companies) as well as the majority of the group’s fixed-line and mobile customers

• Free (31%), will take over the entirety of the low-cost ‘RED’ by SFR subscriptions, as well as around two million standard mobile and internet SFR contracts

• Orange (27%) will be given a little under five million customers. They have been limited to this as they already have the largest market share in the Telecoms sector and cannot exceed certain anti-competition thresholds

The deal remains subject to an official review, and may still be rejected by the government over competition regulations. 

There are concerns that reducing the sector – currently dominated by the four operators – to three major companies may have repercussions for customers across the board in the form of higher prices.

No changes for customers ‘until 2027’

While RED contract holders and businesses are now aware of who their new provider would  be, many standard customers will remain unsure of this until further notice. 

French media reports that Bouygues will take on many customers - including most mobile contracts - in rural areas, with contracts in more urbanised areas being split geographically between the three operators. 

A similar split will also take place for internet and landline contracts between the three groups. 

“The migration of millions of subscribers, infrastructure, and systems constitutes a multi-year work programme,” the three buyers said in a joint statement meaning the change will take time.

Tech news outlet Numerama estimates that “nothing will change before the second half of 2027 at the earliest,” the date of the purchase should it be approved.

Customers should look out for emails or other communication from SFR about their contracts in the lead up to and following the official sale (if it takes place).

However, little will change in the day-to-day running of accounts except from the provider. Numbers for both mobile and landlines will remain the same, and contracts (including for internet connections) will remain the same.

They also need to be mindful of scammers. SFR was the recent victim of a major cyberattack, and fraudsters may look to use the confusion from the impending sale to trick customers. 

If consumers do not want to wait for their contract to be switched automatically, they can opt to make a manual switch now.

Will the sector benefit? 

One of the primary concerns over the deal is the reduction in competition in a sector already controlled by a limited number of operators. 

The four groups control the vast majority of landline, internet, and mobile contracts, either directly or via subsidiaries such as RED or Sosh (Orange).

The arrival of Free in 2012 on the telecoms scene disrupted the original trio (SFR, Bouygues, Orange), leading to price wars and deals to attract customers.

Consumers largely benefited and were able to shop around as prices across the board were reduced, and France remains one of the cheapest countries in Europe for mobile phone and internet contracts. 

There is a concern however that if SFR’s customers are split between the existing companies, prices will see an upward trend as the groups see less need to entice customers away from each other. 

In addition, despite Free’s emergence in 2012, it would be difficult for a new company to enter the market. 

Founder of Free Xavier Niel was reportedly motivated to disrupt the sector due to the three rivals being found guilty of collusion and keeping prices artificially high and being fined €534 million for doing so. 

However, he had the backing of several successful companies and name recognition through the company’s internet contracts, something any new competitor would struggle to attain in France.