The spectrum currently used for Digital Terrestrial Television (DTT) in France will be put up for auction and awarded to telecommunications operators in December 2015. The government intends to sell licences for the 700 MHz band for mobile broadband, with the auction expected to raise more than €2 billion.
All four of France’s major mobile network operators are expected to participate, seeking to use the 700 MHz band to expand or launch mobile broadband services. The licences will allow operators to begin using the spectrum once the airwaves are cleared between 1 October 2017 and 30 June 2019. In some regions, portions of the band could become available as early as April 2016.
Xavier Niel, founder of the group that owns Free Mobile, has suggested the auction will reveal which operators are prepared to commit to long-term investment. As a relatively recent entrant to the market, Free Mobile is likely to bid aggressively to increase its spectrum holdings in the 700 MHz auction.
Bouygues Telecom faces a more complicated competitive landscape after cable operator Numericable and mobile network operator SFR formed an alliance earlier in the year. That tie-up has raised speculation about consolidation in the French market and has been compared to BT’s acquisition of EE in the UK.
At this point it seems only Free Mobile would realistically be allowed to join a larger rival
Altice, the owner of Numericable, indicated continued interest in acquiring Bouygues Telecom. Altice CEO Dexter Goei said, “I would be surprised if there’s not some effort in 2015 to get this done, we view ourselves as the most natural buyer [of Bouygues Telecom].” If permitted by competition authorities, a combined SFR and Bouygues would command roughly 49% of the French mobile market.
Given that potential market share, it is understandable why Altice would pursue such a deal—provided regulators clear it. From an outsider’s perspective, Free Mobile appears the most likely candidate to be allowed to merge with a larger operator, because it currently holds about 14% market share.
Do you think Free Mobile will secure the spectrum it needs? Let us know in the comments.