Bouygues Telecom’s takeover of La Poste Telecom reduces the size of the country’s MVNO market, but the regulator found no risk of harm to competition
The competition authority has approved the deal unconditionally
On 19 August 2024, France’s competition authority – the Autorité de la concurrence – cleared the takeover of La Poste Telecom by Bouygues Telecom without conditions. Bouygues Telecom is one of the country’s largest telecoms operators, while La Poste Telecom offers fixed-line services and operates as a mobile virtual network operator (MVNO) using the SFR network under La Poste Mobile brand. It is now the largest MVNO in France with around 2.3m customers. Bouygues Telecom notified the Autorité of its plan to acquire sole control of La Poste Telecom on 12 July, which is jointly owned by the La Poste Groupe (51%) and rival telecoms operator SFR (49%). Altice subsidiary SFR would have had the right of first refusal on acquiring La Poste Telecom outright, but appears not to have opted to exercise that option. SFR has been a keen acquirer of MVNOs in recent years, contributing to the declining market share of MVNOs (as a percentage of SIM cards) from 12% to less than 7.5% over the 2013-2023 period. The M&A activity seen in France reflects developments witnessed in Belgium (e.g. Proximus/Mobile Vikings), the Netherlands (T-Mobile/Simpel and KPN/Youfone) and the US (T-Mobile/Mint Mobile), which have reduced the size of the independent MVNO market in these countries.
The risk of harm to competition as a result of the transaction was ruled out
Following the merger review, it was determined that the transaction was not likely to harm competition in any relevant market. In the retail mobile market, the Autorité found that the deal would have limited impact due to La Poste Telecom’s small market share (<3%). It also took into account competition stemming from Bouygues Telecom’s main rival operators Free, Orange and SFR. The regulator also noted that Bouygues Telecom would gain access to an extensive distribution network throughout mainland France for the marketing of La Poste Telecom’s mobile offers, highlighting particular La Poste Group’s post offices and bank branches. However, the Autorité considered that the importance of this distribution network should be put into perspective given the growing share of distance selling (online and telesales) in the mobile market, which now accounts for two-thirds of all sales. Consumers will continue to have access to alternatives via this sales channel, which covers the whole of mainland France, including rural areas where Bouygues Telecom’s competitors do not have physical stores.
It is currently unclear when the acquisition will close
The Autorité also concluded that the transaction would not enable Bouygues Telecom (as a mobile network operator) to refuse access to, or downgrade the conditions for access to, its network for MVNOs competing with La Poste Telecom downstream. The competition authority stated that existing regulatory obligations, competition from other operators in the wholesale market and the absence of any incentive for Bouygues Telecom to implement such a strategy meant that the risk of such a strategy could be ruled out. However, while the merger review did not raise competition concerns, it is currently unclear when – perhaps even if – the deal will be completed. It is awaiting the approval of SFR, which is reportedly against some elements of the acquisition. SFR is also facing the prospect of losing an important wholesale customer as once La Poste Telecom’s access agreement with SFR ends in 2026, its mobile subscribers would be migrated to the Bouygues Telecom network.
