Bouygues says has been talking with SFR about sharing networks

PARIS Mon Dec 3, 2012 2:25pm EST

PARIS Dec 3 (Reuters) - Bouygues Telecom said on Monday it has been holding discussions with Vivendi's SFR about sharing their mobile networks outside France's major cities.

France's Journal du Dimanche reported on Sunday that the two operators had recently resumed talks on network-sharing after having set aside an earlier round of discussions in the spring.

As part of Vivendi's ongoing strategic review, the media-and-telecom group has been exploring options for SFR, France's second-largest mobile operator and Vivendi's biggest revenue generator.

Like France Telecom and Bouygues, SFR has been rocked by a continuing price war touched off by Iliad's launch of a low-cost mobile service in January.

Vivendi has also held talks since October with local cable operator Numericable and Iliad over merger options, according to press reports.

Without citing any sources, the Journal du Dimanche said on Sunday that negotiations between Iliad and SFR had cooled because of antitrust concerns, while SFR-Numericable discussions had also been set aside.

"After recent press reports on talks between Bouygues Telecom and SFR, Bouygues notes that the discussions concern only network-sharing in low-density areas of France," Bouygues Telecom said in a statement.

France's telecoms regulator has defined "priority deployment zones" for the rollout of fourth-generation mobile technology. The zones account for 63 percent of France's territory but are home to just 18 percent of its population.

Network-sharing deals are becoming increasingly common among cash-strapped European telecom operators since they reduce capital expenditures and operating costs while avoiding the regulatory risk of mergers.

Vodafone and Telefonica signed a deal to share mobile antennas in Britain, while France Telecom shares networks with Vodafone in Spain and Deutsche Telekom in some Eastern European countries.

A Vivendi spokesman declined to provide further details on the type of network-sharing being considered with Bouygues or other aspects of the newspaper report.

"There have been ongoing conversations between SFR and Bouygues for a while on network sharing," said the spokesman. (Reporting by Leila Abboud and Gwenaelle Barzic; editing by John Wallace)

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