France Telecom: IPO of EE stake depends on LTE adoption

France Telecom (FT) CFO Gervais Pellissier said that a decision when to launch an initial public offering for a minority stake EE will depend on the pace at which UK consumers subscribe to the operator's premium-priced LTE service.


Pellissier told Bloomberg that any move to IPO EE would be taken with its German partner Deutsche Telekom, and could take place toward the end of next year or early 2014.

This indication from FT's CFO comes as EE announced that its LTE network will be expanded to cover a further 17 towns and cities across the UK by March 2013.

"By the end of the first quarter of 2013, LTE will be available in 35 towns and cities across the UK," EE CEO Olaf Swantee said in a statement. "We're delighted with the progress of the LTE rollout – we are improving the network every day. This has struck a chord with businesses in particular, with great demand being seen."

Of note, EE said that it will continue to increase the density of LTE coverage until it matches that of the EE 2G and 3G network. "As well as increasing capacity to meet the demand from thousands of new customers signing up to 4GEE [the company's brand name for its LTE service], this ensures that LTE is available throughout an entire area with strong voice and data service available indoors," he said.

EE remains the only UK operator offering commercial LTE service, though its competitors are expected to launch their own LTE service in the middle of 2013 following the UK's LTE spectrum auction. The auction will begin in January. EE offers LTE plan for consumers that start at  £36 ($57.62) per month on a two-year contract, with 500 MB and Wi-Fi, plus unlimited voice and texts. Prices range up from there to include plans that offer 1 GB of data for £41 per month, 3 GB for £46, 5 GB for £51 and 8 GB for £56. All of the company's LTE smartphone plans come with unlimited voice and texts.

Pellissier also confirmed that FT will consider bidding for TeliaSonera's Yoigo unit in Spain by the end of the year and is potentially interested in Vivendi's Maroc Telecom. However, he hedged any offers by telling Bloomberg that bids would be subject to "numerous conditions" including price and any asset overlap.

In an effort to restore investor confidence--FT's share price has plunged 30 per cent this year--Pellissier said that the company will examine what assets it can sell to finance any acquisition opportunities.

"We're one of the European phone companies that aren't subject to worry about balance-sheet issues," Pellissier said. "Still, having an eye on our balance sheet means we're not going to do foolish acquisitions and we're not going to spend inefficiently on capex."

For more:
- see this Bloomberg article
- see this EE release

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