Orange may be close to Bouygues deal
Unlike Hutchison, Orange may only attract French regulatory scrutiny for its proposed acquisition of the country’s third MNO, Bouygues Telecom. Since selling its 50% stake in EE to BT, Orange now generates a sufficiently high percentage of its sales in France to qualify for national, not EC, probes.
CEO Stephane Richard, who has until March 31 to finalize terms, said last week that an agreement with the other French operators – Altice, owner of SFR, and Iliad, owner of Free Mobile – was close. This would see Bouygues’ assets being divided up in a way that would satisfy the competitors, and the regulators, that Orange would not become too dominant, and that consumers would not suffer from the reversion to a three-MNO market, ending the massively disruptive four-operator episode which began with the entry of Free Mobile in 2012.
“These talks are nearly completed,” Richard said. “I think we roughly agree on the major points of this dividing up.” Analysts believe the French regulators would demand less stringent remedies than their EC counterparts, even though there is, in many ways, a stronger case to answer in France than in the UK. In the former, whatever the divestments, the merger would strengthen a firm which is already the market leader, while in the latter, it would provide a more powerful counterweight to the newly enlarged quad play leader, BT.
The head of the competition authority, Bruno Lassere, said recently that his agency would be as rigorous as the EC, but many believe that France has lost its appetite for a four-operator market, given the price wars, consolidation and job losses that have resulted from the introduction of Free Mobile.
But other players are concerned that, if wildly different approaches are taken in different countries of the EU, there will be negative implications for operators which are looking to work across borders, and for creating a rational and unified regulatory framework across the Union in future.