French mobile operator SFR is hoping to make its market debut in early July, its CEO Jean-Yves Charlier has said.
Parent company Vivendi is in the process of hiving off the unit into a separate company – the first step towards an IPO. Charlier…
French mobile operator SFR is hoping to make its market debut in early July, its CEO Jean-Yves Charlier has said.
Parent company Vivendi is in the process of hiving off the unit into a separate company – the first step towards an IPO. Charlier reportedly told journalists following a news conference today that the spinoff process is “well advanced”.
A demerger will further allow Vivendi to focus on its media operations, which include Canal+, bought out from Lagardere, as well as Universal. In Brazil Vivendi also owns GVT, which operates telecoms services as well as pay TV.
The conglomerate has sold its 85% stake in videogame maker Activision Blizzard and is close to completing the sale of its 53% interest in Maroc Telecom.
Hiving off France’s second-largest mobile operator into a separate entity will also remove the operator’s debt from Vivendi’s balance sheet. In the face of a price war in the French wireless market, SFR has seen its revenues decline. For the first nine months of 2013, they were down 10.5% to €7.6bn (US$10.3bn) compared to the same period last year.
SFR is among a number of telecoms players that could IPO in 2014. The list also includes Spanish cableco Ono and Sweden’s Com Hem. Telecoms holding Altice successfully listed late last week.
But it has been speculated that following the demerger, SFR could instead become an acquisition target, with several strategic players reportedly interested. These include cableco Numericable – owned by Altice – and rival operator Bouygues Telecom.
SFR, Bouygues ink network sharing deal
Meanwhile, SFR and Bouygues have signed an agreement to deploy a shared mobile network that will be available to 57% of the country’s population. The network will be controlled by a joint entity. The agreement is expected to result in total annual savings of €300m.
Telecoms regulatory authority Arcep acknowledged the positive effects for consumers of the network joint venture.
“At a time when market competition is increasingly fierce, and operators’ expenditures continue to be high, especially for 4G network rollouts, resource pooling agreements can provide telcos with a way to reduce their costs and increase the benefits passed onto users, including increased coverage and a better quality of service from both operators,” Arcep said.
However, the regulator noted that SFR and Bouygues need to remain independent from one another, in both their business strategies and sales. The agreement should also not lead to competitors being squeezed out of the market and must result in better coverage and quality of service, Arcep warned.
The regulator will perform a detailed analysis of the deal within the coming weeks.
SFR and Bouygues entered exclusive talks about mobile network sharing in July 2013.
A few months later, Iliad’s Free Mobile, the latest entrant in the French mobile market, signalled its intention to join the proposed network sharing agreement.
Iliad chief executive Maxime Lombardini said at the time it would be a “major destabilising factor” if the deal between the two large operators did not make room for Free.
Free’s entrance into the French market in 2012 sparked a price war with the three historical operators – Orange, SFR, and Bouygues – losing market shares rapidly.
The CEO of incumbent Orange, Stephane Richard, said last year that the size of the French market did not justify four operators.
He added that a network sharing between SFR and Bouygues would be “a form of consolidation”. Richard however stressed he was not considering a similar move with Free, despite the two companies having a 3G roaming agreement in place.
