03 May 2018
After little more than a year out of the industry, Alexandre Pébereau has a new company that is buying iBasis and Altice’s wholesale business. He’s looking for more, he tells Alan Burkitt-Gray
Alexandre Pébereau is back
in the wholesale telecoms industry after a gap of –
blink and you’ll have missed it – just a
little over a year since he left Orange. He came storming back
into the business in March 2018 by announcing two deals within
a few days to acquire two substantial international
First, his new company, Tofane Global, will buy
KPN’s wholesale operation iBasis. Then, the Altice
Group, which owns French mobile operator SFR and the former
Portugal Telecom, said that Tofane was the sole bidder for its
wholesale voice carrier business in France, Portugal and the
No price on either of them, but Pébereau says the two
deals will push Tofane to a leadership position in the
wholesale business. Now he’s looking for more
acquisitions for Tofane, which is named after a mountain range
in the north-east of Italy.
"This industry needs to consolidate," he says. "It needs
scale; it needs to be more and more global. It is a very
competitive sector and at the same time for large carriers
– especially European or North American carriers
– it is not the core of their activity."
He means that such wholesale operations are "not the focus
of interest" of their parents, yet have to compete on the
global wholesale market with the rest of the industry. "It is
important to have very competitive costs."
Hence the opportunity for Tofane. "I really wanted to lead
this consolidation and I decided to go and launch Tofane
– to create an independent carrier in voice to start
with, but also to work in mobile services."
He has teamed up with Patrick George, a former BICS,
Syniverse and Orange International Carrier executive, who says:
"iBasis has turned around its mobile data strategy," he says.
"Now on 4G roaming they are one of the top players in the
world." This was one of the key factors when Tofane started
discussions with KPN about iBasis. "It’s not only
good on voice – but also on mobile data,
they’re positioned very well," explains
It’s clear from the conversation that
Pébereau and George – described as a senior
adviser – have been talking about ideas for some time.
When did they start discussions?
"Last year," says Pébereau. "Clearly we both saw the
opportunity of coming back to the market." George adds: "We met
each other as competitors in the early 2000s and then I had the
pleasure of working with Alexandre in Orange to help him
strengthen the mobile offer of Orange – and from that
period on we stayed in contact and Alexandre shared his
The wholesale business is "non-core for most carriers",
grumbles Pébereau. "The industry is ready for
consolidation but with fully independent players instead of
Scale is important, but he sees an increased willingness
among "all the telecoms players" to look for ways of "carving
out" their wholesale business. "I was able to see that
everybody was looking for consolidation," he says. Companies
wanted to "be a consolidator" or wanted to let someone else
look after their wholesale business.
The iBasis story
KPN led the way by asking for tenders for iBasis as part of
its "strategy of simplification and focusing on the
Netherlands", says Pébereau. "For them it makes sense to
outsource voice or to sell the department." KPN decided on its
strategy a year ago, he notes.
But hasn’t iBasis shown falling revenues? Yes,
he agrees, but that’s a direct consequence of
KPN’s selling off operations outside the
"They [iBasis] have never lost money and they still make a
lot of money," he says. "KPN used to be in Germany, Belgium,
France, Spain and the UK with an MVNO." Within "less than three
years they concentrated on the Netherlands", he adds. That
drove iBasis’s sales down from €1.4 billion
to €700 million, "not because of the performance of iBasis
but really a reflection of the parent company’s
KPN owned 56% of iBasis until 2009, when the Netherlands
company bid for the other 44%. It offered $48 million, but
iBasis said that this was "wholly inadequate". KPN increased
its offer from $1.55 a share to $2.25 and the dispute went to
court in the US. Eventually KPN paid $3 a share, nearly twice
its original offer.
Pébereau left Orange International Carriers in 2016
and set up Tofane the following year. "I found some investors
to come with me," he says, "and we went to several boardrooms
to propose to carve out their business."
But "it was not on the priority list" of most of them.
However, KPN had initiated a formal bidding process "and wanted
only industry players" to bid for iBasis. "They wanted
long-term commitments to contribute to the consolidation and
the digital transformation of iBasis – to transform
iBasis for the next digitisation era."
With that deal done, "KPN is going to stand by iBasis and
Tofane Global in the long term," he says. "We have a
partnership contract that goes way beyond the strategic plan
– it is important to iBasis that the former parent
company should stand by its side."
Who are the investors behind Tofane? "The first funds are my
own funds. I put my own money in and the other partners are
following. The others are minority partners and they share the
strategic vision that we have, that this industry is
undervalued because of the voice decline – but the
value in the international industry is growing."
Tofane’s website lists the
company’s partners: the investment vehicle of the
SCOR group, a reinsurer; Ciclad, a private equity investment
firm focused on medium-sized companies, including telecoms
companies; and Trocadero Capital Partners, a private equity
investor focusing on small and mid-market European companies.
Another partner is Les Comptoirs, a French integrated
Pébereau himself is very well connected in the French
business and banking world – and not just from his
time at Orange. Earlier in his career he spent 10 years with
various elements of the Bolloré group, a transport and
logistics company whose current CEO is Vincent Bolloré
– also chairman of the supervisory board of Vivendi,
the largest shareholder in Telecom Italia (TIM).
The younger Pébereau says his own task now is a
question of making the value proposition of Tofane clear to
investors. "Closing the two acquisitions in the same week is a
very good sign for us," he says. "We are able to attract new
investors into our own industry, in our own right, not just as
part of something in the international communications
iBasis brings all the services of mobile data, including
Diameter, IPX and GRX as well as wholesale voice. Altice, on
the other hand, is just voice. But those services will be built
on the iBasis platform. "As we are showing with the Altice
opportunity, it is a great platform to build upon. iBasis is
the cornerstone of our strategy."
Tofane’s second opportunity arrives when
Altice, having rapidly built up interests on both sides of the
Atlantic, including US-based broadband cable operators, decided
it was time to backtrack. "Altice decided that they would
really focus on their core business and that international
wholesale was not core business for Altice," says
"For them it was important to demonstrate that they could
execute a strategy quickly. They ran a very competitive bidding
process, limited to industry players." The process started in
October 2017, he adds. The deal howver "is not signed
But the previous iBasis deal means the for Altice "they will
be at the very leading edge of the technology for 4G and then
Now, before work starts on future bids, "we have to
integrate the two companies. They are the partners of 800
carriers around the world." The Altice wholesale deal brings
relationships with SFR and the incumbent operator of
Tofane’s investors "became really interested
the moment we were able to show them with the iBasis process
that major players such as KPN were and are in the process of
carving out their international services", he says. "The KPN
process was the proof of the pudding. They [the investors] have
come for the long run. They have an appetite to grow with us
for more operations."
How much are they putting in? How much is Tofane spending on
its two acquisitions so far. "The considerations for those two
operations are confidential. I can’t share that
with you. What we can say is that for future operations we have
enough money to finance them – it’s not
an issue," he says.
And will there be more? "Some investors are calling us and
saying they are ready to finance the next operations. There is
money available for transformation and consolidation.
It’s about having a clear business model with a