The French Competition Authority has given its conditional approval to the purchase of mobile and broadband operator SFR by cable operator Numericable and its parent company Altice. The authority identified risks to competition in the following areas: A strengthening of SFR Numericable’s position in the residential broadband market, a reduction of telecom operators in the business markets, a very strong market power in the mobile phone market in Reunion (66% share) and near monopoly in Mayotte (90%), and a risk to competition in the pay TV market as Canal Plus owner Vivendi will keep a 20 percent share of the merged company.
The Competition Authority has therefore obtained commitments from Numericable and SFR to remedy the risks to competition. Numericable will open its cable network to Orange, Bouygues Telecom, Free and MVNOs wishing to offer fixed broadband services. ISPs will be able to distribute their service and modems for cable internet access. Numericable will also have to offer a bitstream access to ISPs. SFR-Numericable’s access offer will be submitted competition authority for approval to avoid any scissor effect on prices. Numericable will have to respect SFR’s fibre sharing agreement with Bouygues Telecom and cannot block Orange from deploying its fibre in areas reserved for SFR under an earlier deal.
Numericable has agreed to sell the copper network of business operator subsidiary Completel and will have to give business operators wholesales access to SFR and Completel’s local fibre loop.
Numericable will have to sell the Outremer Telecom’s mobile businesses in Reunion and Mayotte to allow a new competitor to emerge in these markets.
Finally, Numericable has made a commitment to not communicate any strategic commercial information to Vivendi in markets in which they compete, namely pay TV in France and telecommunications in overseas French territories. A trusted third party will take part in SFR Numericable’s board meetings and audit committee meetings to ensure that no sensitive information is communicated.
All four commitments are in effect for a five year renewable term and their application will be monitored by an independent party approved by the Competition Authority.