A merger between Orange and rival Bouygues Telecom would require a green light from French competition authorities and not the European Commission, improving its chances of success, said the Financial Times.
The story quotes “at least two people with knowledge of the matter” who believe Orange’s revenue profile (domestic versus international) is such that that the merger should fall under scrutiny by French competition authorities.
Orange confirmed it was in preliminary talks with Bouygues Telecom two weeks ago but is not yet at the point of announcing a firm proposal for submission to regulatory authorities.
Sources argue the sale of Orange’s stake in UK operator EE pushes the French operator’s revenue profile more towards domestic scrutiny.
Whether the deal is scrutinised by Paris or Brussels is seen as crucial. Analysts argue it has a better chance of success with domestic competition authorities than before Margrethe Vestager, the EC’s competition chief.
The sale of EE by Deutsche and Orange to BT closed last week after the UK’s Competition and Markets Authority gave it a green light.
French regulators, and politicians, are seen as more concerned with issues such as investment and skills than the EC, which is more focused on maintaining levels of competition.
Taking into account industrial policy concerns would make the deal more likely to succeed, say analysts, whereas such factors count less with the commission.