News that Virgin Mobile France has become a "full MVNO" with France Telecom (FT) Orange has heightened speculation that this agreement could trigger Orange to make a bid for the MVNO.
The move to a full MVNO agreement with Orange will see Virgin Mobile France operating its own core network components and interconnection equipment. Geoffroy Roux de Bézieux, the CEO of Omea Telecom and majority owner of Virgin Mobile France, said that it will "strengthen its commercial and technical autonomy."
Roux de Bézieux also took the opportunity to state that there were no ongoing talks with Orange concerning a merger, despite comments reported by French newspaper La Tribune that an unnamed industry insider predicted that Virgin Mobile would be acquired, probably by Orange, before December 31.
The UK-based phone retailer Carphone Warehouse currently owns 47 per cent of Virgin Mobile France and has previously indicated that it will sell its holding at some stage. Orange declined to comment, according to La Tribune.
Analysts have already started to calculate the likely price that Orange might need to pay to acquire Virgin Mobile based upon Bouygues Telecom's purchase of the MVNO Simyo owned by KPN. This deal is thought to have been around €20 million on the basis of €100 per customer. if that pattern holds, Virgin Mobile France could cost around €280 million to acquire.
Virgin Mobile signed a full MVNO deal with rival SFR last year which was seen as the company indicating to its long-term partner Orange that it must offer a similar working arrangement.
The current MVNO deal that Virgin Mobile has with Orange is thought to generate annual revenues of as high as €250 million for Orange. While the entry of Free Mobile continues to cause upset within the French operator community, Virgin Mobile's Roux de Bézieux says that it only lost slightly over 1 per cent of its customer base to the new entrant. However, the MVNO has lost its position as the country's "fourth operator" to Free Mobile, given that Free is now said to have gained over 2.5 million customers.
Fore more:
- see this release
- see this La Tribune article (translated via Google Translate)
- see this separate La Tribune article (translated via Google Translate)
- see this Les Echos article (translated via Google Translate)
Related Articles:
Europe's MVNOs challenged by new threats and opportunities
French MVNOs angered by Free Mobile's wholesale rates
French MVNOs cut prices to combat Free Mobile
SFR chief blames Orange for enabling Free Mobile's low-cost service
Free Mobile rush overwhelms French number portability systems
Iliad's Free Mobile finally unleashes price war in France