French government urges further telecoms consolidation

French government urges further telecoms consolidation

The French government is likely to bring down the number of domestic telecoms operators to three players, according to a senior government official.

The French market, consisting of four players, is thought of as one of the most competitive in Europe. France’s economic minister Arnaud Montebourg said yesterday that competition in the sector was hurting broadband pricing in particular in the country.

The government has urged consolidation in the market and it recently backed a bid from Bouygues to acquire Vivendi’s SFR earlier this year. Vivendi eventually chose to accept a counter bid from cable operator Numericable and the market was kept at four players.

Montebourg however told France’s parliament that they will eventually have a three-operator industry.

“We will get there, to having three operators that are able to invest and that will stop destroying jobs and killing each other,” he said.

A price war in the French mobile market was sparked by Iliad, and the deal between Numericable and SFR is expected to increase pricing penetration.

Bouygues, which failed to acquire SFR, has been urged by the government to seek an alternative operator to acquire.

“We’re working on the sector’s consolidation,” commented Montebourg. “We haven’t always succeeded, because it’s a free market. The state is facing its responsibilities and stating its preferences.”

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