France Telecom’s Swiss sell-off attracts more suitors

15 September 2011 | Guy Matthews


France Telecom’s bid to find a buyer for its Orange Switzerland subsidiary has attracted the attention of two more potential buyers: Egyptian investor Naguib Sawiris, owner of Orascom Telecom, and CVC Capital Partners.

Sawiris has spent the last year rearranging his telecoms portfolio, including the offloading of Greek operator Wind Hellas for $1.7 billion, giving him the potential to make a speedy cash payment for the asset.

CVC owns rival Swiss cellco Sunrise, formerly the property of Danish incumbent TDC. France Telecom sought to acquire Sunrise from TDC in 2009, but was blocked at the time by the Swiss regulator. That regulator has yet to rule on whether an acquisition of Orange Switzerland by CVC, or any other major Swiss operator, would be acceptable or likely to diminish competition to the detriment of consumers.

Other bidders look likely to include private equity players Advent International, Apax, Bain, Cinven, EQT and Providence, as well as Swiss broadband service providers UPC Cablecom, owned by Liberty Global, which recently announced an interest in entering the Swiss mobile market.

The successful buyer will probably need not only to satisfy regulatory concerns but meet France Telecom’s asking price, thought to be in the region of €1.5 billion. Part of France Telecom’s international strategy is to sell off European assets that do not enjoy top two market status, or are not wholly-owned.

According to consulting firm TeleGeography, Switzerland’s mobile services market is highly mature and near to saturation. It recently measured subscriber growth in the market at less than 1% per quarter, making 4G services the likely battleground for licensees to focus around next.