Report: SFR, Free Mobile merger plan blocked by regulator

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A possible merger of SFR and Iliad's Free Mobile has reportedly been quashed by the French competition authority, claiming that the market share of the combined company would be too large.

Vivendi and Iliad, the respective owners of two firms, approached the competition authorities with a merger proposal, according to the French radio station BFM, citing unidentified sources in the industry.

"According to industry sources, the competition watchdog told them they would not accept such a merger, due to the impact the merged company would have on the mobile market and especially the fixed broadband sector," BFM reported, according to French newspaper Les Echos. "A combination of SFR and Free Mobile would see them controlling 50 per cent of the fixed internet access, which would then become a virtual duopoly with France Telecom Orange."

Vivendi and Iliad declined to comment, according to Bloomberg.

SFR has nearly 20.9 million mobile customers and 5 million fixed-line subscribers as of Sept. 30, while Iliad had 4.4 million mobile users and 5.3 million fixed subscribers. France Telecom Orange had 26.6 million mobile customers and 17.8 million fixed-line subscribers, according to Bloomberg.

Vivendi informally discussed the sale of SFR last last year with former co-owner Vodafone, but negotiations failed after the two firms put widely different valuations on the company, according to Bloomberg, citing unnamed sources of its own.

Separately, Free Mobile has gained access to new 900 MHz frequency bands following the return spectrum from the country's three other mobile operators.

Orange and SFR both reportedly handed over 2.4 MHz of spectrum apiece, while Bouygues Telecom returned 4.8 MHz, according to Telegeography. Free Mobile is expected to use the 900 MHz bands to improve its indoor 3G coverage.

For more:
- see this Les Echos article (translated via Google Translate)
- see this Bloomberg article
- see this Reuters article
- see this Telegeography article

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