Vivendi takes knife to SFR projects, plans new strategy
Vivendi CEO Jean-Bernard Lévy has taken immediate action since assuming the role of CEO for SFR by halting 100 projects that are underway within the mobile operator. In a meeting with trade unions, Lévy said that advertising spend would be cut, recruitment stopped, the opening of new retail stores would be curtailed and R&D frozen, according to documents seen by Bloomberg.
Lévy said this move was necessary until a new strategy for the company was defined, and committed to meet the unions before June 6 and present the direction the company would be taking.
According to Reuters, which also cited internal SFR documents, the operator said a fresh strategy was necessary to survive the brutal competition brought about by new mobile player Free Mobile. However, the internal documents provide no details on the amount of money Lévy is looking to save by the planned cost-cutting measures.
Despite this display of action by the new SFR CEO, stock market broker HSBC announced it was downgrading Vivendi from overweight to neutral and lowering the price target from €23 to €16.
HSBC analysts blamed the move on the ongoing negative impact from increased competition by Free Mobile, adding that Vivendi does not have the tools to defend itself from the tough marketing stance being adopted by Free Mobile's parent company Iliad, according to Sharecast.
Separately, SFR announced that its HSPA+ network now covers 30 per cent of the French population and is providing theoretical downlink speeds up to 42Mbps. Pierre-Alain German, SFR's director of networks, told Les Echos that this level of performance was providing its customers with LTE-like speeds today.
In addition, the company announced it would launch commercial LTE services early next year following tests that are already underway in Marseille.
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