Numericable Virgin deal approved by French regulator

French telecom operator Numericable’s acquisition of Virgin Mobile France was approved by the country’s competition regulator yesterday (November 27th).

Numericable, which is also in the process of buying France's second mobile operator SFR, agreed in June to buy Virgin Mobile France from Carphone Warehouse and the Virgin Group for an enterprise value of €325 million (£258 million).

An IPO was initially considered, but the current telecom consolidation trend, coupled with the desire from Altice (owner of Numericable) to grow its customer base, led Virgin Mobile's owners to sell, Le Monde reports.

As a mobile virtual network operator (MVNO), Virgin Mobile rented capacity on the network of SFR to serve its customers.

The regulator approved the deal on the condition that the cable giant allows rivals to lease capacity on its fixed broadband network so they can devise their own fixed-mobile offerings.

Funding for Virgin Mobile's operations will be mainly provided by Vivendi, the former owner of SFR, which should bring €200 million out of €325 million.

MVNOs represent seven per cent of the telephony market share in France. These virtual operators have long thrived on low-cost packages for highly targeted users.

France's competition authority was concerned that the expansion of Numericable's customer base through the purchase of SFR and Virgin Mobile would allow it to exert leverage through marketing offers combining Internet access at very high speed and mobile services, arguing that other MVNOs could be penalised.

But the authority pointed out yesterday that the commitments made by Numericable to SFR already prevent that risk.

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