Orange could buy smaller European operators – exec

Orange could buy smaller European operators – exec

03 JUN 2015

The head of Orange’s European operations, Gervais Pellissier, said the company would be interested in acquiring smaller operators in the region, according to the Financial Times.

This list could potentially include players like Telecom Italia, as well as Netherlands-based KPN and Belgacom in Belgium, the report said.

There has recently been a renewed focus on deal-making in Europe, although the focus has been on in-market consolidation rather than cross-border alliances.

Pellissier said “there will be inter-country or intra-European consolidation” in the next five years where “players who are today playing on a single market or near to a single market, might be purchased by those who are bigger.”

“For sure, one of those might be a target for us,” he added.

However, he admitted that regulators may oppose consolidation.

“The official political speech that the new executive body in Brussels of the Union will be more in favour of consolidation is not completely true,” he said, adding that “the view of the commission on the number of players, at least for most of the market, has not completely changed that four is better than three.”

For his part, Pellissier believes “the situation with four players is not sustainable in the long term” in France and went on to say that the only player “not for sale in the French market is us.”

Ultimately though, he said “the choice is not in our hands. It is up to others to decide what to do.”

In March, Telecom Italia quashed speculation about a tie-up with Orange, with Giuseppe Recchi, chairman of the Italian player, stating there is “nothing on the table”, and that Telecom Italia is “focused on the Italian and Brazilian markets.”

This was after Orange CEO Stephane Richard said that Telecom Italia presented “an attractive European consolidation opportunity,” only to later play down the comment saying it is a “purely internal discussion”.

In some ways, an alliance between the two would make sense: there is no overlap between Orange’s European and African markets and those of Telecom Italia in Europe and Latin America.

Orange is Europe’s second-largest service provider by number of subscribers and has been dealing with price wars in its home market of France ever since the arrival of low-cost operator Free in January 2012.

Telecom Italia, which has struggled with debt, is often seen as a potential target, with its Brazilian assets particularly regarded as attractive.

But it is also seeing signs of stabilisation in its home market, having invested heavily in improving the quality of its fixed and mobile networks.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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