(Adds minister comments, background)
PARIS Jan 31 French network operators Bouygues
Telecom and SFR agreed on Friday to share
part of their mobile networks to improve client coverage and
With the French market locked in a price war since low-cost
player Iliad launched a mobile service two years ago,
operators are looking to cut costs. Network sharing is the only
real option because the French government has warned it would
not look favourably on a merger that would reduce competition.
The shared network of Bouygues and SFR and will cover 57
percent of France's population, the operators said in a joint
The agreement will involve the creation of a joint entity to
manage the infrastructure - a process which will take until 2017
to complete, but each operator will retain total commercial
independence, they said.
"This agreement will allow the two operators to improve
their mobile coverage and achieve significant cost savings," the
French Industry Minister Arnaud Montebourg told a telecoms
conference that he welcomed the SFR-Bouygues announcement.
(Reporting by Gwenaelle Barzic; Writing by Lionel Laurent;
Editing by Pravin Char)