Bouygues' €950 million MVNO bid delayed as sellers squabble

The French telecoms operator made a disclosure to that effect on Wednesday, some three months after it inked a €950 million exclusivity deal to buy La Poste Mobile from fellow French network operator SFR and La Poste.

Back in February Bouygues Telecom said it would seal the deal this calendar year, subject to antitrust approvals and so forth. But that deadline is now in doubt. The telco said SFR and La Poste have notified it of differences between them with regard to the terms and conditions of the transaction, leading La Poste to turn to the dispute resolution mechanisms written into their joint venture agreement. Naturally, we are not privy to the nature of the dispute.

"This could have an impact on the timetable for completion of the transaction," the operator said, without elaborating further. Doubtless the timescales associated with dispute resolution are unpredictable.

Bouygues Telecom had planned to migrate La Poste Mobile's customers to its own network in 2027, given that its wholesale deal with host and parent SFR expires at end-2026. Presumably it still stands a chance of keeping to that timeframe, assuming the differences between SFR and La Poste can be overcome.

News of the dispute will have come as a blow to Bouygues Telecom, which is clearly keen to assimilate La Poste Mobile's operation into its own, given that it was willing to pay as much as €950 million for it and its 2.3 million customers.

It's probably not great news for SFR either, whose parent company Altice is on a debt-reduction quest and could do with the cash injection. It holds 49% of La Poste Mobile to La Poste's 51%, incidentally.

To make matters worse, Altice France reported quarterly financials on Wednesday that did not make for particularly comfortable reading. The firm saw revenues drop by 3.8% year-on-year in the three months to the end of March, coming in at €2.56 billion; within that overall top line, fixed-line service revenues were up slightly, but turnover from mobile and business services slid by 3.2% and 8.1% respectively.

The figures were mainly driven by customer base fluctuations, in the fixed and mobile sectors at least. SFR's fixed customer base declined slightly to 6.3 million, but the company considered that a stabilisation, doubtless aided by a 7% increase in fibre customers to 4.9 million. However, on the mobile side the picture was bleaker, connections – including dongles but excluding M2M – dropped to a shade under 20 million, over 700,000 fewer than the company claimed a year earlier.

Falling revenues and increasing costs meant a reduction in earnings. Adjusted EBITDA slid by 6.4% to €790 million.

All in all, that's not a great result for Altice, which faces a turbulent time in France as it battles to balance its obligations to creditors with its leverage-reduction initiatives. Losing subscribers at its core business just adds to its woes.

Meanwhile, rival Bouygues Telecom, which posted growth in fixed and mobile customers at its Q1 results earlier this month, as well as growth in service revenues, is left playing the waiting game as SFR and La Poste squabble over the sale of their MVNO.