Stephane Richard (pictured), Orange CEO, stressed urgency in cutting the number of mobile network operators in France from four to three. “If something is to happen, it will happen in the coming weeks,” he added.
Richard made his remarks on a French radio station, fuelling speculation that Orange – France’s largest mobile operator – might be nearing a deal to buy third-placed Bouygues Telecom.
France’s economy minister Arnaud Montebourg, according to Reuters, confirmed last week that Orange and Bouygues were in talks.
The urgency for consolidation, said Richard, increased following the agreed tie-up between SFR – the second-largest mobile operator in France – and Numericable, the country’s largest cable operator (owned by Altice, an investment group).
Bouygues had been in the running to strike a deal with SFR, but its failure to fend off Altice means France’s hyper-competitive mobile market still has four network operators, including Free Mobile – run by the Iliad Group. Free Mobile has sparked a long-running price war through aggressive discounts.
There is also media speculation that Bouygues, after losing out on SFR to Altice, was the subject of takeover talks by the Iliad Group.
Richard’s remarks on French radio comes shortly after he talked up the need for consolidation at Orange’s AGM this week.
“The truth is that there is probably one mobile network operator too many in France,” he told EuroBusiness Media in an interview held at the firm’s AGM. “Which one? It’s a bit too early to say.”
He argued that the desire by European regulators to have at least four mobile network operators was not sustainable.
“It’s no coincidence that Germany is planning to reduce theirs from four to three and the same thing is happening in Ireland, a much smaller country,” he said. “Similar projects are also underway elsewhere in Europe. So I think that economic reality is triumphing over ideology here: markets are limited, are already saturated and so there’s only room for three operators. I am convinced that this is the case.”
Richard’s push for consolidation has government support.
“We will get there, to having three operators that are able to invest and that will stop destroying jobs and killing each other,” Montebourg told the National Assembly, the lower house of France’s parliament, earlier this month
And there are signs that regulatory attitudes in Europe might be softening. The European Commission yesterday approved the merger of Telefonica-owned O2 Ireland with Hutchison Whampoa’s 3 Ireland.