The French telecom market may be getting ready to undergo some transformation at the top during 2016 if discussions between Orange and Bouygues Telecom continue during the holiday break to forge an agreement for Orange to acquire Bouygues Telecom. Reports indicate France’s largest carrier, Orange, may be considering the acquisition of Bouygues Telecom to help maintain its position. However, some are concerned that this move would reduce competition by cutting the number of major carriers from four down to three.
Bouygues Telecom currently finds itself stuck between the two heavyweights in France – Orange and SFR/Numericable – and a smaller, nimbler carrier in Free which is competing on cost and efforts to stay lean. This makes for an incredibly competitive market in France.
Meanwhile, Orange is the leader with a huge network that it continues to invest in. Some have questioned whether Bouygues Telecom would really add anything to Orange, since the carrier is doing fine with its network and in attracting customers. A move that effectively eliminated the third largest carrier though would help Orange limit competitive pressures and maintain some upward pressure on prices.
As in other countries, even if the companies were to manage to reach an agreement, regulatory hurdles would still need to be crossed. Sources think the relative calm surrounding the holiday season provides a good time for Orange and Bouygues Telecom to continue their discussions, including ways to appease the government bodies, like possibly spinning off part of Bouygues to Free. There is also the question of how much the deal could be valued at, a number that has not been forthcoming from any sources just yet.
source: Les Echos
via: TechCrunch
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