Numericable agrees to buy Virgin Mobile France for €325M

Numericable has agreed to buy Omer Telecom, which operates under the Virgin Mobile brand in France, for €325 million ($443.8 million) after the successful conclusion of exclusive talks with existing shareholders Carphone Warehouse and the Virgin Group.

Altice, the parent company of the French cable operator, confirmed in mid-May that Numericable had made an offer for the mobile virtual network operator (MVNO) Virgin Mobile France.

At the time, Carphone Warehouse, which owns 46 per cent of Omer Telecom (also known as OMEA Telecom), said the parties would carry out the necessary consultations with employee work councils during the exclusivity period. The transaction is still subject to the approval of the French Competition Authority.

The move represents a further overhaul of a mobile communications market that has already seen Vivendi agree to sell its telecoms unit SFR to Altice, despite fierce lobbying by Bouygues Group for the unit to be merged with Bouygues Telecom. Altice plans to merge SFR with Numericable and recently signed the definitive agreement with Vivendi on this purchase.

Once SFR is joined together with Numericable, a new fixed and mobile powerhouse is set to emerge on the French telecoms market, creating a more formidable rival to Orange, Bouygues Telecom and Iliad, which owns Free.

Bouygues Telecom has suffered the most from the cheap mobile deals introduced by Free Mobile in January 2012, and has seen its turnover fall by 26 per cent over two years, while costs have increased by 10 per cent. The company also incurred an operating loss of €19 million in the first quarter of 2014.

After talks to merge with either Orange or Iliad were also inconclusive, Bouygues Telecom now says it plans to cut 1,516 jobs. However, analysts have suggested that this "aggressive plan" of Bouygues Telecom was in fact designed to bring consolidation to a head, and believe that a merger with one of its rivals is still very much on the agenda.

Bouygues Telecom has also just revealed new lower prices for its fixed-line services, offering super high-speed fibre broadband, television and fixed phone calls for €25.99 per month.

For more:
- see this Carphone Warehouse statement

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