Vivendi chief Lévy takes control of SFR following CEO Esser's sudden exit
Vivendi CEO Jean-Bernard Lévy is taking immediate and direct control of its mobile operator subsidiary SFR as the company struggles to combat the price war unleashed by Iliad's Free Mobile. This move follows the resignation of the veteran SFR CEO Frank Esser, who has taken the blame for the company not reacting with sufficient speed to the threat posed by Free Mobile and its low-cost offers.
While there had been growing speculation that Vivendi would need to take drastic action to stop the decline in SFR's subscriber numbers, the lack of an effective turnaround strategy and the impact SFR is having on Vivendi's share price seems to have triggered the need for Esser's resignation, according to a report in the French newspaper Le Figaro.
Commenting on the executive reshuffling, Stephane Beyazian, an analyst at Raymond James Euro Equities, told Bloomberg: "What the market really wants is to understand what SFR's strategy is going to be in France and what measures management is going to take, namely to adjust costs."
Esser's departure appears to have been amicable, and Vivendi is reportedly not rushing to find a replacement. However, several names are already being put forward as possible contenders, according to Le Figaro, including Bertrand Meheut current Canal+ CEO Bertrand Mehut, Vodafone Europe CEO Michel Combes and former Lagardère Active CEO Didier Quillot.
According to an unnamed source cited by Bloomberg, Lévy will now have to quickly devise a response to Free Mobile, and has tasked Pierre Trotot, a senior exec vice president with SFR, with leading the effort to restructure the company and reduce costs.
Plans to cut costs are thought to range between €300 million to €400 million, according to Le Figaro, together with a significant overhaul to SFR's low-cost "Red" brand, which has failed to stem the tide of customer defections to Free Mobile. In comparison, Bouygues Telecom with its "B&You" and Orange with "Sosh" have been more effective at retaining customers interested in low-cost plans.
Turning around SFR will be a personal priority for Lévy given that he had been anxious to acquire complete ownership of the company and spent, according to the Financial Times, €7.7 billion last year buying a 44 per cent shareholding in the operator from Vodafone, Vivendi's former joint venture partner.
- see this release
- see this Le Figaro article (translated via Google Translate)
- see this separate Le Figaro article (translated via Google Translate)
- see this Bloomberg article
- see this Financial Times article (reg. req.)
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