SFR will undergo more cuts to its operating expenses following a strategy meeting lead by Vivendi CEO Jean-Bernard Levy.
The operator, which previously announced an operating expense budget reduction of €450 million for this year, now faces a further cut of €350 million in 2013, people with knowledge of the matter told Bloomberg.
The strategy meeting chaired by Levy took place last weekend, with Vivendi spokespeople saying there was nothing to report. Since then, Levy has confirmed at a private media conference that Vivendi will meet its full-year forecasts.
However, Levy's attempt to push ahead with reducing expense at SFR has been met with resistence, according to Bloomberg. Company executives disagree on how these cuts should be implemented. Any reorganisation or job cuts within SFR would require discussions with French labour unions which often lead to protracted negotiations.
Forthcoming announcements are likely to be delayed until the arrival of Michel Combes (Vodafone's current European head) who will take over as SFR's CEO beginning Aug. 1. Levy has already stated that Combes will provide the 'strategic vision' for the operator as it attempts to stop its customers from leaving and becoming Free Mobile subscribers.
Separately, ratings agency Fitch has stated that Vivendi's BBB rating could come under pressure unless the conglomerate can reduce its liabilities. Fitch also noted the potential legal damages relating to a $956 million verdict this week in a U.S. lawsuit over Vivendi's 2001 purchase of Liberty Media's stake in USA Networks. The French company said it would appeal the ruling.
For more:
- see this Bloomberg article
- see this separate Bloomberg article
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