Two big European mobile network operators discuss potential merger

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Vodafone and Orange were talking about a potential merger without reaching an agreement. The merger can still happen.

French opposition

French authorities aren’t in favor of a proposed merger between Vodafone and Orange, Europe’s largest mobile provider. The companies had been in talks about the deal before reportedly putting their negotiations on hold due to French opposition.

French news channel BFM TV revealed that talks between the companies occurred towards the end of last year and early 2021.

At least for now, it’s only a matter of months before Orange becomes part-private. However, France Telecom still owns 23% shares as they were previously state-run when known as “France Telecom.”

Paris didn’t like the idea of a joint headquarters in London and that was enough reason to take the company out of merger negotiations.

Current State of European Telecom

Telecoms giants in Europe are frustrated with the current state of competition and fragmentation, which makes investing for next-generation networks difficult.

On the other hand, the CEO of Orange, Stephane Richard, has been in charge for over ten years. He was recently convicted and sentenced to prison after a court found him guilty on charges related to fraud with aggravated circumstances. Meaning, he will serve at least six months behind bars before being eligible for release.

The question remains what Orange currently thinks of a possible merger. A merger with Vodafone would have many benefits for both companies, with their European and African operations largely complementary. Spain is the only major market in which they compete now; if this partnership were to happen, it could allow competitors access into new markets.

The two companies might still be open to a joint venture partnership. A story that can still develop.