Vivendi's SFR, Bouygues Telecom Discuss Network Sharing in France

By Sam Schechner

PARIS--Vivendi SA's (VIV.FR) French mobile operator SFR and competitor Bouygues Telecom (EN.FR) entered exclusive talks Monday to share part of their mobile-phone networks in France, the latest cost-saving move by French operators as they reel from a brutal price war.

SFR and Bouygues--France's No. 2 and No. 3 mobile operators by number of subscribers, respectively--said late Monday that they hope to come to a strategic agreement by the end of the year to share parts of their mobile-phone networks, using a model similar to those already in operation in other countries.

The two companies said their proposed network-sharing agreement would allow them to boost their geographic coverage and face "the challenge of investing in super high bandwidth networks." But they added that they would retain an "independent capacity for innovation, and total commercial independence."

Network-sharing deals, which are common in countries like the U.K., let operators share towers, and in some arrangements even antennas, transmitter equipment and maintenance personnel. That can allow significant savings as operators roll out expensive network equipment.

Since last fall, all four of France's main phone operators, including incumbent Orange SA, and low-cost upstart Iliad SA, have been privately discussing such agreements as a way to cope with a price war started when Iliad launched its Free Mobile operator in January 2012. In March, France's competition authority said it was ready to bless such deals in a preliminary opinion.

Write to Sam Schechner at [e-mail]; follow on Twitter: @samschech

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