October 29, 2012 / 5:51 PM / 7 years ago

France's Iliad, SFR in discussions - Les Echos

PARIS, Oct 29 (Reuters) - Vivendi’s SFR is in discussions about a tie-up with Iliad, which shook up France’s mobile market when it launched its low-cost Free Mobile offering earlier this year, Les Echos reported on its website on Monday.

The two mobile operators have not yet reached the stage where they are holding technical meetings, the newspaper said, adding that previously reported contacts between SFR and unlisted cable company Numericable were more advanced.

Vivendi and Iliad declined to comment.

Vivendi has been reviewing its strategy and business portfolio as it seeks to reverse a deep slump in its share price over the last few years. It is also working to slash annual operating costs at SFR by 500 million euros ($645 million).

Long the group’s cash cow, SFR has been hammered by a price war launched by Iliad, which is hitting profits and forcing it to spend to keep clients. Its first-half sales fell 5.9 percent to 5.76 billion euros, while core profit fell 5 percent to 1.85 billion.

Les Echos reported that a combination of SFR and Free could bring savings of 1.3 billion euros, citing Natixis analysts.

Capital magazine reported earlier that Iliad no longer ruled out buying a rival such as SFR or Numericable. ($1 = 0.7749 euros) (Reporting by James Regan and Cyril Altmeyer; Editing by Christian Plumb)

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