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Consolidation close in France and Italy, say reports

dealThe French and Italian mobile markets could both be on the verge of significant consolidation, according to reports from news agency Reuters. In France incumbent telco Orange has set two investment banks to investigate the potential takeover of rival Bouygues, while talks have resumed between Hutchison and Vimpelcom, which own 3 Italia and Wind respectively, about a potential merger. In both instances Reuters cited unnamed sources close to the situation.

There is little to surprise in the French news. Bouygues was left hanging recently when it was outbid by Altice-owned Numericable for control of French operator SFR. With 11.86 million customers, according to numbers from Informa’s World Cellular Information Service Plus, Bouygues is some distance behind second-placed SFR, on 20.96 million and market leader Orange on 26.73 million. Meanwhile the hugely disruptive Free Mobile is hard on Bouygues heels, having roughly trebled its subscriber base in two years, to 9.23 million at the end of the first quarter this year.

In mid-May Orange published a statement on its website in which it said that it was “assessing the opportunities that the changing landscape in the French telecommunications might offer,” adding that it believes “consolidation in the French mobile market would be positive in the long term for both investment and for the consumer.”

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In Italy it seems that Hutchison has been emboldened by the European Commission’s recent approval of its takeover bid for O2 Ireland and the deal between Telefónica and E-Plus in Germany. Wind and 3 Italia are the third and fourth players in Italy, with 3 a good distance off the main pack, counting 8.46 million subscribers at end Q1 this year, according to WCIS+. A merger with Wind would create a new number two in the market, with 30.49 million customers, fractionally behind incumbent Telecom Italia on 30.99 million and ahead of Vodafone on 27.77 million.


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