Orange CEO Stephane Richard believes the wave of consolidation in the European telecoms market will reach France next year, after the country has concluded its planned 700-MHz spectrum sale.
But while Orange is not on tenterhooks waiting for consolidation in its home market, it is keen to take part in future cross-border M&A activity in Europe, the executive said in an interview published in Les Echos on Monday.
The consolidation process has begun in all the major European markets, apart from France, Richard said. "There is a French exception," he said.
Consolidation is not at the top of the agenda for telcos in France at the moment, but that could well change next year, after the sale of new frequencies for 4G, Richard predicted.
In July the French government formally launched the process to allocate 30 MHz of spectrum in the 700 MHz band. The sale is due to take place by the end of t he year.
France is "the European country in which operators’ margins are the weakest," said Richard in the interview.
He insisted that Orange has a solid business and thus needs consolidation less than its rivals do.
"Numericable-SFR is losing customers, Bouygues Telecom is gaining them but is still stretched financially, and Free needs to invest heavily in its network," he said.
Richard also answered questions on the rise of Numericable-SFR parent Altice in the telecoms space. He expressed admiration for the way in which executive chairman Patrick Drahi is building up the company, in no small part thanks to access to cheap debt, but warned that the firm has a higher debt burden than his own.
"I would rather be in our position than that of Altice," he said.
"Altice still has a lot to prove," Richard added. "Its leaders must bring coherence to what at present is still a collection of assets."
Looking further afield than France, Richard made it clear that cross-border consolidation is on the horizon in Europe and that Orange will look to play a part in it.
"We are playing in national markets, while the Internet giants play on the global stage," he said.
However, for inter-market consolidation to take place, Europe will have to move closer to a single telecoms market, he explained. When that happens, or when the picture becomes clearer, Orange will play a role in consolidation.
"Alongside Vodafone and Deutsche Telekom we are already a major player in multiple European markets," Richard said. "We are not starting from zero."
