French regulator ‘opening the door’ to mobile consolidation

22 May 2018 | Alan Burkitt-Gray


The planned merger of Sprint and T-Mobile US may lead to consolidation in the French market, according to French regulator Sébastien Soriano.

He told the newspaper Le Monde that, with record investment in infrastructure in France last year, he “would welcome a consolidation project”.

Soriano, president of the Autorité de Régulation des Communications Électroniques et des Postes (Regulatory Authority for Electronic Communications and Posts, Arcep), said that operators are fulfilling their mission.

The four operators – Orange, Altice’s SFR, Bouygues Telecom and Iliad’s Free – last year invested €9.6 billion on fibre and 4G networks, excluding spectrum payments. “This represents an increase of 37% in three years and a quarter of their turnover,” he said in the interview.

Orange represented “a little less than half” of the total investment, he said.

But Free was “running out of steam”, he said. “When one operator is fine, the other is bad,”, he added, asking: “Does this not mean that market consolidation is needed?”

Soriano said that “Arcep’s door is opening”, implying he was willing to listen to consolidation proposals. He warned that operators “must have a value-creating project for the country, and not for shareholders only”.

He said that the proposed Sprint/T-Mobile US merger, which still needs regulatory approval in the US, will lead to higher investment in 5G.

Orange and Bouygues were involved in extensive discussions in 2016 about a merger, but the talks collapsed after both parties failed to agree on the value of construction company Bouygues’s telecoms unit as well as its future stake in Orange. Bouygues was said to have sought a 15% stake in Orange but the French government wanted to retain a dominant stake in the incumbent.

This morning Soriano continued on the theme, saying that in 2017 operators in France invested €660 million more than in 2016. Soriano said: “Two years ago, I asked operators to break open their piggy banks, to rise to national coverage challenges, and enable France to catch up on the connectivity front. With an investment of €9.6 billion, we are seeing the sector’s growing commitment to making up for lost time, and coming in line with the country’s infrastructure needs.”

He said in a separate interview, with Next INpact, “We cannot continually be in a situation of working to catch up. Now that the sector is fully galvanised, we must absolutely not fall behind with 5G.”