Bouygues sends list of complaints to the EC

17 Dec 2002

It has emerged that French mobile operator Bouygues Telecom sent a letter to the European Commission in October complaining about France Télécom’s [NYSE: FTE] plans to raise new funds via a share issue next year. France Telecom is 55.5% owned by the government and on 5 December announced that it will receive a EUR9 billion loan from the state which it plans to repay with funds from a planned EUR15 billion share sale next year. Bouygues’ has complained that the French public is therefore being forced to pay twice to help France Télécom, the other time being during the PTO’s purchase of mobile operator Orange in May 2000. France Télécom acquired Orange from Vodafone for GBP25.1 billion and on completion of the deal merged it with both its domestic mobile operation France Télécom Mobiles and its international mobile activities to form a ‘new’ Orange. In February 2001 15% of Orange was floated in an international IPO which raised EUR9 billion, valuing the new company at EUR45.2 billion, less than a third of the figure the parent company had originally anticipated. By the end of June 2002 Orange accounted for almost 35% of group revenues, with 41.4 million customers under the control of its subsidiaries.

Recent figures from ART, the French telecoms regulator, show that Bouygues Telecom is hurting, bleeding 320,500 customers in the three months to 30 September to end the quarter with a base of 5.58 million. Its rivals fared better, although their growth was minimal; SFR – currently the subject of a battle between Vivendi and Vodafone – added 277,100 to take its total to 12.65 million, while Orange France netted 169,000 to raise its base to 17.73 million. Of the 35.96 million mobile users in France, 15.98 million were connected to pre-paid packages.