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How the Merger of Two of its Largest Providers May Transform the French Telco Market
Written by Mathieu Carrere · Translated by Joel Gilbourd On @ 8:21 am | No Comments
In Economics & Business, France, French, Quick Reads, Technology, Western Europe
The recent merger between French telcos SFR and Numericable is but another example of the broader trend that dominates today’s telecommunications market: operators are seeking to integrate their products in order to respond to their business clients’ growing desire for streamlined communications solutions. This merger also threatens the dominance of Orange, which – until now- has enjoyed a privileged position among corporate and business clients.
The merger is a major operation which is poised to radically transform the corporate telecommunications market. Each of the 2 companies already has a significant individual market presence and there have been no comparable upheavals since 2005, when Cegetel and Neuf Telecom merged  to form Neuf Cegetel (which then became a subsidiary of SFR). Since 2010, many players have been ‘merged out’ of the telco market (the Club Internet, AOL, Telecom Italia and Cegetel brands, for example, have all been retired). This has been the market's way of responding to operators’ growing desire to at once be present in both the fixed-line and the mobile markets. The merger between SFR and Numericable falls neatly in line with this trend – it would appear that the companies are trying to merge in order to meet consumer expectations concerning price and simplicity .
This market pattern has also been driven by the fact that operators need to invest heavily in new infrastructure to maintain their quality of service. The SFR-Numericable merger, for example, will help both of the merging companies to meet their needs in this field. Lionnel Piar, Telecommunications vice-president at CGI Consulting  stated :
Industriellement, ce qui est intéressant dans le rapprochement, c’est qu’on a d’un côté un SFR qui a plutôt des offres mobiles, et de l’autre un Numericable plus sur la partie câble. Avec ce rapprochement, on est plus dans la notion d’opérateur global qui va être capable de proposer l’ensemble des services à une entreprise.
From an industry perspective, the interesting thing about this merger is that, on the one hand, you have SFR which offers mainly mobile products; and, on the other hand, you have Numericable which is more about cable. With this merger, we are moving towards the notion of a unified operator which can single-handedly offer corporate clients a full suite of services.
And it is precisely this new notion that threatens the hegemonic dominance that Orange currently enjoys on the B-to-B market  . Orange currently holds a 70% market share and, while SFR and Numericable currently hold 20% between them, the newly merged entity is hoping to attain 30%.
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URL to article: /2014/08/19/how-the-merger-of-two-of-its-largest-providers-may-transform-the-french-telco-market/
URLs in this post:
 Cegetel and Neuf Telecom merged: http://www.nytimes.com/2005/05/11/business/worldbusiness/11iht-ftel.html?_r=0
 consumer expectations concerning price and simplicity: http://www.mvnodynamics.com/2011/03/30/fixed-mobile-convergence-comms-business/
 Lionnel Piar, Telecommunications vice-president at CGI Consulting: http://www.journaldunet.com/solutions/cloud-computing/fusion-completel-sfr-business-team/
 hegemonic dominance that Orange currently enjoys on the B-to-B market: http://www.distributique.com/actualites/lire-les-telecoms-d-entreprise-souffrent-encore-du-poids-d-orange-20422.html
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