Iliad can Play with Europe's big boys

Play’s shareholders have overwhelming backed a takeover offer from Iliad, leaving the French firm in a position to call itself one of the biggest mobile groups in Europe.

Iliad announced the €2.2 billion acquisition of Polish mobile operator Play in September, having already secured 40.2% of its shares from its two major holders; it launched a tender offer for the remainder last month which drew to a close last week. The results showed Iliad has secured 96.7% of Play’s share capital and voting rights.

“This acquisition represents an important step for Iliad, which now has 42 million subscribers in Europe across France, Italy and now Poland,” said Iliad CEO Thomas Reynaud.

As Iliad informed us a couple of months ago, that size of customer base makes the telco the sixth largest mobile group in Europe. But playing in the big leagues is about more than just connecting large numbers of mobile customers.

“Iliad wishes to support Play to expand its footprint in the Polish mobile market and facilitate Play’s  entry into the fixed-line services market to benefit both the retail and business market in Poland,”  Reynaud said.

And to benefit Iliad, of course, which started out as a fixed-line ISP in its native France in the 1990s. It has grown a lot since then; it continues to challenge France’s established operators in terms of both fixed and mobile customer additions, and is in the process of building a market share in Italy, where it launched as a disruptive mobile provider in 2018.

And there is a growth opportunity in Poland too. There is plenty of competition in the fixed-line market already, but fibre is still in the early stages, with penetration standing at 6.5% last autumn, according to figures from the FTTH Council Europe and IDATE. That puts Poland towards the bottom of the European ranking of countries by FTTH/B uptake.

“We are convinced that there is much more room for fibre in Poland,” Julien Ducarroz, CEO of market leader Orange Polska said alongside the publication of the telco’s third-quarter results last month.

Orange claimed 2.66 million fixed broadband access at the end of Q3, of which 662,000 were fibre connections, an increase of 40% on the year-ago quarter thanks to 54,000 fibre net additions, its biggest ever quarterly number. It aims to further its broadband ambitions in Poland through the FiberCo project – we’re not the most creative when it comes to naming network initiatives in this industry, are we? – which will roll out open access fibre networks in mainly underserved areas. Orange is still on the lookout for an external investor for FiberCo.

The point here is that there is an opportunity for an Iliad-backed Play to make its mark in the fixed-line market. And Iliad knows a thing or two about breaking into new markets.