SFR could play kingmaker as rivals line up for MVNO

Orange, Bouygues Telecom and Iliad have all submitted bids for a 51% stake in La Poste Mobile, according to a report in Les Echos. French postal service La Poste currently holds the shares. There has been talk of its offloading its stake since last summer, although it has said very little publicly, but the paper notes that would-be buyers were invited to submit firm offers by mid-February.

Its sources say that the bids tabled value the whole of La Poste Mobile at between €600 million and €750 million, so we're looking at a fairly sizeable deal here.

The MVNO has a customer base of 2 million, according to Les Echos – the company's parent is more cagey about its data – built up over the dozen years since it arrived on the scene. It is also profitable, and is experiencing strong growth. It's not hard to see why the market's MNOs would be interested.

Competition between the MNOs in France remains tight. The operators' own data and that shared by Arcep does not fully match up, presumably due to different methods of reporting, but essentially Orange leads the market by some margin serving a third or more of mobile users; its overall base, came in at 36 million at the end of 2023.

The other three are much closer together; SFR claimed a customer base of pushing 21 million at the end of the third quarter of last year, while Bouygues Telecom and Iliad's Free each had around 15 million. The figures may not be wholly comparable, but they serve to illustrate how valuable those 2 million Poste Mobile customers could be to one of the big guns, particularly the chasing pack.

The most interesting element of this story though is not who would benefit from a customer base boost, but which player might be able to shape the outcome to its own ends.

That party is SFR, which is not named in the Les Echos report as having lodged a bid for La Poste Mobile, but realistically has the biggest chance of picking up the stake, should it so desire.

SFR holds the other 49% of La Poste Mobile that is not up for sale. Coupled with the fact that it has a right of first refusal over La Poste's stake, that should put it in pole position to take over the MVNO.

But with parent company Altice on a big debt-reduction push, shelling out hundreds of millions of euros might not be an option for SFR at the moment.

And more than that, this could be an opportunity to make another dent in that debt pile for Altice; if three mobile networks are lining up for a majority stake in La Poste Mobile, would they not jump at the chance to pick up SFR's shares too?

We can't know that, of course. And SFR may well not want to sell. It has a valuable MVNO piggybacking on its network that it would doubtless like to keep there.

But even if buying the majority stake is not an option for SFR – and it is starting to look that way if Les Echos' sources are correct – the telco will still play a big part in the way this sale plays out. As the minority owner, it has the right of veto over any sale its partner brokers, and that puts it in the driving seat in this situation. Whatever the outcome, SFR will play a major role.