The three bidders say they stand by their offer in a mobile market that grew by just 0.4% in 2024
Reuters reports that Altice France, which owns SFR, immediately rejected the €17 billion bid from its three French rivals, Altice’s CEO Arthur Dreyfuss informed staff almost as soon as the offer was made. Bouygues, Orange and Iliad said in a joint statement that they noted the rejection but stood by their bid.
The statement read: “The three operators remain convinced of the relevance of their bid and of the value of the project they are pursuing for the market and all its stakeholders, customers, employees, creditors and shareholders.”
Reuters cited a research note from J.P. Morgan analysts that said the €17 billion offer was better than expected, as they had previously estimated a standalone value of €16 billion, with synergies underpinning a price tag above €20 billion.
Now it comes down to how much Altice wants or needs to sell, and how realistic its hopes of getting a higher price are.
SFR at a glance
SFR has lost nearly 1.5 million mobile customers since summer 2023, according to Ecostylia, with churn rising once it ended discounted offers and poor customer ratings: it came fourth out of the four in a customer satisfaction survey run by telecoms regulator Arcep, published in May.
The situation was not helped by a a serious outage in June which resulted in customers across France having no access to SMS, calls or the internet.
Better positioned for sale
In August, Reuters reported that Altice France’s debt restructuring had been approved by Paris’ commercial court. The report said, “Markets have speculated that Altice France would offload SFR to cut its debt as higher interest rates and a heavy debt repayment schedule weigh on the privately-held company.
“In an internal email, reviewed by Reuters, Altice and SFR directors said the restructuring deal would cut Altice’s financial debt by more than €9 billion ($10.4 billion), reduce financial costs by nearly €400 million per year, and postpone upcoming repayment deadlines to between 2028 and 2033.”
Prior to this, Altice had been in negotiations for months with creditors to reduce its debt from €24.1 billion to €15.5 billion. Reuters noted that the court did not follow a public prosecutor’s request to exclude SFR from the restructuring, which could open the way for a sale. Altice stated that it had no offers were on the table at that juncture.
Reasons not to raise the bid
In its annual report on the state of France’ telecoms market, published in May, French telecoms regulator Arcep noted, “Revenue in the mobile market increased only slightly (+ 0.4% YoY in 2024) after three straight years of growth, while the average monthly revenue per SIM card is levelling off at €14.90 excl. VAT.
“This weaker momentum in the mobile market can be explained in part by a decrease in the price of mobile catalogue services since 2023. New plans with smaller data allowances, which better align with certain users’ needs, are being offered at lower prices.”
A source with knowledge of the matter told Reuters in September that anything below that range would be unacceptable for SFR, which is France’s second-largest telecoms provider with more than 19 million mobile subscribers and 6.1 million fibre customers as of June.
France has had four mobile network operators since 2012: Orange, Bouygues, Iliad’s Free and SFR. Any deal to reduce the number of carriers to three would need approval from European and French regulators.
