Orange Switzerland could fetch EUR1.5 billion

9 Aug 2011

France Telecom (FT) subsidiary, Orange Switzerland is expected to sell for around EUR1.5 billion (USD2.14 billion), bankers told Reuters. The telco was prevented from merging with its nearest rival Sunrise by Switzerland’s competition regulator last year and is being divested by FT as part of a strategy of consolidation whereby European assets that are not 100% owned or are not in one of the top two positions are sold off in favour of footholds in emerging markets. Due to the maturity of the market and the strong competition posed by the incumbent Swisscom, the cellco’s sale is not an obviously inviting prospect for other telecoms operators. Amongst the parties purported to be interested in Orange Switzerland are private equity firms Apax Partners (which was last month pipped at the post in a race to buy Poland’s Polkomtel) EQT and Providence Equity. After last year’s merger was blocked, it is unlikely that either Swisscom or Sunrise would receive permission to purchase Orange Switzerland. Cable group Liberty Global Inc. is a possible candidate for the purchase, however. Liberty Global’s subsidiary in the country, UPC Cablecom currently offers pre-paid wireless services over Orange’s network via a mobile virtual network operator (MVNO) agreement with FT. According to TeleGeography’s GlobalComms Database, UPC Cablecom has been looking to enter the mobile market in earnest in order to offer better quad-play services to its customers, and if it chooses not to place a bid for Orange, will have to wait until the existing licences expire in 2013 to have a chance of doing so.

Switzerland, Orange Group, Salt (Switzerland)