France will go back to having three telecom players -minister

PARIS Tue May 13, 2014 10:40am EDT

PARIS May 13 (Reuters) - The French government will succeed in bringing down to three the number of domestic telecom players, Economy Minister Arnaud Montebourg said on Tuesday, stressing that tough competition in the sector was hurting jobs and investment in high-speed broadband.

"We will get there, to having three operators that are able to invest and that will stop destroying jobs and killing each other," Montebourg told the National Assembly, the lower house of France's parliament.

Earlier this year, the government backed a bid from Bouygues to take over Vivendi's SFR unit and combine it with its own Bouygues Telecom division, but Vivendi in the end chose cable firm Numericable, keeping the number of mobile operators at four.

The deal creates France's second-biggest telecoms player behind former monopoly Orange, but it weakens smaller operator Bouygues, which is expected to step up its job-cutting plan to cope with the mobile price war sparked by upstart operator Iliad.

Montebourg suggested on Monday that Bouygues explore a tie-up with other operators.

"We're working on the sector's consolidation. We haven't always succeeded, because as you know it's a free market... but the state is facing its responsibilities and stating its preferences," Montebourg said.

"We just so happen to be shareholders of an operator, and not the least" he added, referring to Orange, in which the state holds a 27 percent stake. He did not elaborate.

(Reporting by Yann Le Guernigou; Writing by Natalie Huet; Editing by Andrew Callus)