The French market may see another attempt at consolidation next year, when the next auction of LTE frequencies takes place, according to Orange CEO Stephane Richard. While Orange is the least likely to participate in any mergers in France, Richard said in an interview with Les Echos that the situation of each of its main rivals "raises questions". "Numericable-SFR is losing customers, Bouyges Telecom is adding them, but is still in a delicate financial situation, and Free must invest massively in its network," Richard noted.
An attempt earlier this year by Numericable-SFR to acquire Bouygues Telecom and sell part of their combined assets to Free was rejected by Bouygues. While the price war in France has abated, Richard noted that the country is still in the midst of continuous promotions by the major players and the sector's margins are among the lowest in Europe. When the 700 MHz band comes up for auction late this year, this could increase the financial pressure on some players.
Richard said Orange was more interested in cross-border consolidation. Once the situation is more clear on the plans for the European single market, he said Orange will be ready to play a role in international consolidation. In addition to Europe, he reiterated the company's commitment to expanding in Africa, which already contributes 11 percent of group revenues and where he said growth is accelerating.
Orange France will not take part in the ongoing war of promotions in France, the CEO said. Orange is positioned on service quality rather than on low-cost. The comapny prefers to invest in its network and service quality, an approach which allowed it to increase ARPU by EUR 3 for LTE and by EUR 5 for fibre.
