Orange will complain to France’s competition authorities about regulatory and tax concerns over the planned merger of cable operator Numericable and mobile operator SFR, Orange chairman and CEO Stephane Richard told the Financial Times. He said Orange would raise a number of issues, including advocating for equal treatment between cable, copper and fibre, citing the different VAT rate applied to cable and access to bundled TV content.
Richard expects the merger to mark the start of a period of consolidation in the French telecom market as operators battle to survive after a severe fall in prices over the last two years. Prices are stabilising now. Richard said “SFR/Numericable will be very indebted, there is a big question mark around Bouygues, and Free have a lot of investment to make in the future. The players have a limited capacity to be very aggressive in terms of price cuts.”
He added that in the mid-term the idea is still open of bringing external investors into EE, Orange’s joint venture with T-Mobile in the UK. He does not think AT&T is a likely candidate as its interest in Europe is probably lower than it was 18 months ago.
Orange is considering its options to grow its fixed line network in Spain, where it could extend an agreement to deploy fibre with Vodafone, grow its own services or acquire another operator. Richard noted that Jazztel was the only operator on the table, but that its valuation was too high due to a ‘bubble’ in the cable market, which means it is not its preferred option.
