While an in-market mobile merger in France appears likely, consolidation in Portugal’s fixed broadband market is facing strong opposition
In France, Bouygues Telecom to acquire the country’s largest MVNO
On 22 February 2024, in France, Bouygues Telecom entered exclusive negotiations to buy La Poste Telecom, the country’s largest MVNO, which is owned by La Poste group (51%) and SFR (49%). The deal would see Bouygues acquire around 2.3m mobile customers and gain access to La Poste’s distribution network, while giving La Poste Telecom an opportunity to develop a new fixed line proposition. Once La Poste Telecom’s wholesale access agreement with SFR ends in 2026, its mobile subscribers would be migrated to the Bouygues network. Similar to developments seen in the Netherlands, the deal would represent further consolidation in the mobile market in France, with SFR a keen acquirer of MVNOs in recent years. The transaction would require approval by the Autorité de la concurrence and SFR not acting on its right of first refusal for La Poste Telecom, which currently appears unlikely as parent company Altice seeks to reduce its debt.
In Denmark, Norlys offers wholesale fibre access concession to secure Telia acquisition
On 28 February, in Denmark, the Danish Competition Authority (the KFST) approved Norlys’s acquisition of Telia’s Danish business, which includes approximately 1.9m customers (the vast majority of which are mobile subscribers, with some others taking fixed broadband or telephony services) and a 50% stake in the TT network, currently co-owned with Telenor. The KFST had previously voiced preliminary concerns that the acquisition could significantly harm competition in both the fixed broadband and mobile markets, particularly Norlys’s ability to leverage its position in one of these markets to attract subscribers in the other and to bundle services together to the detriment of its rivals. The authority launched a Phase II investigation into the deal in mid-December 2023, which led to Norlys making binding commitments to address the KFST’s concerns. These stipulate that, any retail service providers will be able access Norlys’s fibre infrastructure (now and in the future) on equal and non-discriminatory terms.
In Italy, Vodafone looks to exit the market with limited regulatory significance, although its Portugal deal is in doubt
Meanwhile, Vodafone has confirmed it’s in exclusive discussions to sell its Italian unit to Swisscom for an enterprise value of €8bn (£6.8bn) on a cash- and debt-free basis. Swisscom has stated that it would merge Vodafone Italia with its local subsidiary Fastweb, combining the operators’ mobile and fixed networks to create a leading converged challenger (to TIM). While both parties have acknowledged there is no guarantee that any transaction will ultimately be agreed, regulators are likely to be more open to this deal than the previously-proposed Vodafone Italia/Iliad Italia merger, which would have combined two of the country’s four mobile network operators. However, in Portugal, the outlook for Vodafone’s planned acquisition of Nowo looks uncertain. In its preliminary review, the Autoridade da Concorrência (AdC) considered the merger could have negative impacts on competition and consumers. It rejected Vodafone’s first remedies package, which included the divestment of spectrum to, and wholesale fibre access for, rival Digi. Having also dismissed suggestions that Nowo could end up a ‘failing firm’, the AdC is reported to be currently considering a strengthened second set of commitments from Vodafone.
