France Telecom’s Stephane Richard dismissed rumors that the company is planning to merge with German Rival, Deutsche Telekom, in order to cut costs. The French telecom sector has seen new challenges arising, including the launch of the low-cost mobile carrier, Free, by the billionaire Xavier Neal, which has cut profits for many companies.
Mr Richard was optimistic though, and said France Telecom is resilient enough to weather the new challenges, especially after a lucrative roaming agreement with Free.
Competition has been tough against Bouygues Telecom and Vivendi’s SFR, but France Telecom has the upperhand in the domestic pricing war which has challenged the sales of many telephone companies in the country.
A number of joint venture deals have been sealed by France Telecom with their German counterpart, but Mr. Richard was quick to clarify that the cost-cutting measures will not lead to a merger, which could have created a telecom titan in the Pan-European region.
The French telecom company however has sealed more promising ventured with UK’s Everything, Everywhere, and the group is ready to make more acquisitions in the big European Markets when viable. Currently, all interested eyes are on Yoigo, Spain’s fourth-largest mobile operator.
Telecom companies in the continent are up against falling revenues in tough economic climate, and competition has stirred a pricing battle in domestic markets. Uncertainty has enveloped France in particular where questions are being raised whether the market can support four operators.
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