Internet service provider Numericable has reportedly confirmed talks with Vivendi to purchase their ailing subsidiary SFR at a valuation of €15 Billion. The deal, which will see the new Numericable-SFR merger owned 32% by Vivendi and 50% by Altice, the parent company of Numericable, was first reported on Les Echos, though rumors of such a deal have been circulating for quite some time.
SFR has been seeing dark days in the past two years – ISP competitor Free launched a price-gauging mobile offer in January 2012, effectively eating away at the market oligarchically controlled by Bouygues Telecom, Orange, and SFR. The latter saw the largest bite taken out of his market share, the result of which saw multiple CEO swaps, the closing of services and pop-up experience stores which marked the heyday for SFR, and ultimately, the declaration by Vivendi that it would likely to separate itself from SFR, which came mid last year. While SFR was expected to go public, the acquisition rumors had been strong.
Numericable & SFR are not the first acquisition by Telecoms as of recent – Japanese TelCo. Softbank announced a $21B injection of capital into Sprint last year – and they may not be the last. Rumors of Free’s merger with Bouygues have been circulating equally as strong as that of SFR & Numericable, and recent reports suggesting that consolidation in the TelCo. market would be good for everyone have left many waiting for the next acquisition announcement.
Over in United States, talks of mergers between T-Mobile and the freshly transitioned Sprint have also been abound. The reports seem to be fulfilling their prophecies – it’s just not easy to differentiate oneself in the market these days, as Internet (both fixed and mobile) become a commodity, we’re likely to see national players look more like the electric & water company. After all, who’s going to build a competing network next to an existing giant?