The consolidation dance goes on in the French telecoms world.
France’s economy minister had confirmed market leader Orange is talking with Bouygues Telecom about a tie-up.
However industry observers questioned the probably of a deal between the country’s number one and number three mobile service providers because of competition issues.
The French government wants fewer telecom firms – three rather than the current four – as tough competition in the sector is hurting jobs and investment in high-speed broadband.
Asked in a interview on BFMTV about reports of the talks, Economy Minister Arnaud Montebourg said “they exist” but that there were “multiple discussions” taking place in the industry.
He also said Bouygues Telecom should explore tie-ups with other operators: “We need to rebuild a telecoms sector that is in ruins.”
Bouygues recently lost out to Numericable in a battle to buy SFR, France’s second largest mobile network operator.
Numericable chases Virgin France
Numericable meanwhile is looking to buy Virgin Mobile France from Britain’s Carphone Warehouse and entrepreneur Richard Branson’s Virgin Group for an enterprise value of 325 million euros.
The companies said they are in exclusive talks.
Virgin Mobile France has struggled in an intensely competitive French market. Last month it reported an 8.6 percent fall in fourth quarter revenue.
Numericable said the acquisition would help it accelerate its strategy of converging high-speed fixed and mobile telecom services.
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