French anti-trust watchdog warns against operator mergers

16 JAN 2013

The French anti-trust regulator has said it is not willing to entertain the idea of consolidation in the country’s mobile market in order to ease a fierce price war.

Speaking to French newspaper Le Figaro, Bruno Lasserre – chairman of the Autorité de Concurrence – said that a merger between networks that would see a return to three national operators was “not advisable.”

The French market was transformed a year ago following the launch of Iliad’s low-cost mobile arm Free Mobile, which put incumbent players Orange, SFR and Bouygues Telecom under immense pressure during 2012.

“The arrival of Free Mobile has created a lot of buzz and even turmoil, but I would bet that in the long term, it will be seen as an effective instrument for the creation of jobs, growth and improving the country’s competitiveness,” said Lasserre. “The effects will become clear in 10 or 15 years.”

In recent months, it has been mooted that Free could merge with either SFR or Bouygues Telecom. When asked about these specific scenarios, Lasserre said he would  “not take sides on cases that are only hypotheses… but I warn against such mergers.”

However, the Financial Times notes that Lasserre is open to the idea of operators sharing their networks to cut costs and jointly cover less profitable areas of the country. The regulator plans to make recommendations to the government on these subjects next month.