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Bouygues Telecom to slash jobs, abandons buyout talks with Iliad and Orange

Bouygues Telecom to slash jobs, abandons buyout talks with Iliad and Orange
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Big job cuts have been announced at France’s third-placed mobile phone operator Bouygues Telecom.

It plans to lay off 1,516 workers and is apparently no longer looking for a buyer for the company.

Announcing it will slash 17 percent of the staff in a bid to reduce costs,Bouygues Telecom’s boss Olivier Roussat said it had halted takeover talks with the low-cost company Iliad and France’s biggest phone service producer Orange.

“Obviously the talks did not succeed otherwise we would not present this plan to remain independent,” said Roussat, declining to give reasons for the failure of the negotiations.

Instead Bouygues plans to go it along hoping the slimming down of its workforce will save 300 million euros a year by the end of next year, and that an expansion in fixed broadband will fuel growth.

To do that it plans to build more nodes known as NRAs into its network to offer broadband directly to 16 million homes from 12 million today instead of renting lines from Orange.

It will also invest more in faster fibre broadband lines.

Iliad’s arrival on the mobile scene in January 2012 sparked a price war that is now driving the pressure to consolidate. Mobile prices fell 27 percent last year and 11 percent in 2012, according to France’s telecoms regulator.

Because of its smaller size, Bouygues has been hardest hit. Its mobile market share declined by three percentage points and its operating margin fell to 15 percent in the first quarter from 22 percent in the same period in 2011.

Bouygues Telecom has been the focus of deal speculation since April, when it lost a bidding war for number two French operator Vivendi’s SFR to cable operator Numericable .