HomeFinance, Earnings and Market ReportsOrange braces for massive probe

    Orange braces for massive probe


    EC to lead four month full scale anti-competitive investigation

    Orange France’s bid for a majority stake in Belgian peer Voo is to be scrutinised in a four-month investigation by EU antitrust regulators following a preliminary review, according to Reuters inside sources.

    The planned acquisition of 75% of Voo, announced in November, valued the company at €1.8 billion euros ($1.82 billion). According Reuters’ telco analyst Foo Yon Chee, this bid underscored Orange’s strategy of offering ‘convergent offers’ in both broadband and mobile to customers in all European countries. “In recent years the telecoms sector has seen operators embark on packages encompassing both broadband and mobile to entice users and grab market share,” said Chee’s report.

    The European Commission’s (EC’s) preliminary scrutiny of the deal ends today (Thursday 28thJuly) and, since Orange did not provide concessions to address the EC’s concerns, this will immediately trigger a full-scale investigation, according to an EC source. The EU competition enforcer has the authority to clear the deal with or without remedies or it can open a four-month investigation if it has serious concerns about any perceived anti-competitive behaviour.

    The Voo deal would give Orange control over the cable network in Belgium’s French-speaking Wallonia region and parts of Brussels, pitting it against rival Telenet. The French company’s Belgian unit owns its cellular network, but has costly contracts with rivals in order to offer broadband services on top of mobile contracts.

    Telenet has just reported a 3% drop in first-half core profit, citing the impact of inflationary pressures and soaring energy prices. The group reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) at €670.6 million ($684.1 million) for the six months ended June 30. Net profit did rise 275% to €793.4 million but that was due to the sale of its tower business.