Bouygues Telecom steps up competition amid M&A rumours

Bouygues Telecom has launched the latest salvo in the French market, introducing a new low-cost fixed line package for €19.99 ($27.46) that the operator sells in combination with its mobile plans.

The company said at a media briefing this week that French households would be able to save an average of €150 a year if they subscribed to the new plan, and it is targeting a 20 per cent share of the domestic fixed-line market as soon as possible, Reuters reported.

The French market has been hit from all sides by aggressive price strategies sparked by the entry of Free Mobile in 2012, with Bouygues Telekom, Orange, SFR and Iliad-owned Free launching lower mobile and fixed prices in a bid to attract and retain users.

Speculation on mergers and acquisition has also dominated the headlines: Vivendi plans to sell off SFR and has been reportedly approached by cable operator Numericable, which is 40 per cent owned by Altice. An unidentified source close to the talks told Reuters that this was prompting rivals, such as Bouygues and Iliad, to consider bidding too.

Bouygues Group CEO Martin Bouygues told Reuters said he was keeping a close watch on the situation but did not want to comment on talk of a possible tie-up with SFR. Bouygues Telecom also recently struck a mobile network-sharing deal with SFR in order to save €100 million a year from 2017-2018.

In addition, Vivendi recently entered into exclusive negotiations with Belgacom on the acquisition of 100 per cent of the Belgian incumbent's Telindus France unit, in order to strengthen SFR's unified communications services for enterprise users ahead of the company's spinoff from Vivendi.

Bouygues Telecom also cut costs by around €599 million last year, but the unit's earnings before interest, tax, depreciation and amortisation (EBITDA) reached €880 million, which Reuters noted was slightly below a target of €900 million. Sales fell 11 per cent to €4.7 billion.

For more:
- see this Bouygues Telecom release (translated by Google Translate)
- see this Reuters article
- see this Bloomberg article

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