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Orange strategy chief says market consolidation does not lead to higher prices for consumers.
It will be another couple of weeks before Orange is able to make a formal announcement on the outcome of its takeover talks with Bouygues Telecom, due to the complexities of the deal, an executive at the French telecoms operator reiterated in Barcelona on Monday.
And should a deal emerge, it will still face tough regulatory scrutiny.
France’s Autorité de la Concurrence "will be as vigilant and scrupulous as the European Commission would have been [in] looking at the impact on competition," Ramon Fernandez, chief financial and strategy officer at Orange, told Total Telecom in an interview at Mobile World Congress.
Since Orange generates more than two-thirds of its European revenues in its home market, any deal is expected to be examined by competition authorities in France, rather than Brussels.
With Orange being the largest player in France, and the least in need of participating in consolidation, any deal will be structured in such a way as to address potential regulatory concerns from the outset.
If the deal goes ahead "we will immediately sell parts of the network, client base, frequencies etc," Fernandez said.
"This is why it’s a difficult deal," he said. "It has to involve other operators."
Iliad’s Free Mobile is the most likely buyer of divested assets, but there has also been talk of SFR picking up some customers.
The carving up of Bouygues Telecom would reduce the number of mobile players in France to three from four, which would likely stimulate more investment in the market, Fernandez said.
"It’s a market where you have to invest a lot," he said, with fibre and 4G rollouts happening at the same time. "It is extremely challenging for all operators to be in a position to do so," he said.
It is not an issue for Orange though, he insisted, which increased capex by €550 million in 2015 compared with the previous year, with €300 million of the extra spend being in France; Orange spent €3 billion in its home market last year.
"The other operators are under significant constraints," he said.
Like Vodafone CEO Vittorio Colao earlier in the day, Fernandez played down authorities’ concerns over M&A bringing higher prices for customers.
"We don’t think consolidation is leading to consumer price increases," he said, explaining that prices increased in Denmark after the failure of the Telenor/TeliaSonera merger in Denmark last year.
"It may be in fact the opposite," he said.
