France Tel in talks with rivals to share 3G network - CEO

JOUY-EN-JOSAS Thu Aug 30, 2012 3:56pm BST

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JOUY-EN-JOSAS Aug 30 (Reuters) - France's biggest telecom operator France Telecom is holding discussions on the possibility of sharing its third-generation mobile network with competitors in order to cut costs, its head said on Thursday.

"There are discussions but no particular timing [for decisions]," Chief Executive Stephane Richard told Reuters on the sidelines of France's Medef employers annual meeting.

He added that France Telecom had held discussions with all its competitors, namely Vivendi's SFR, Bouygues Telecom and new entrant Iliad.

The French mobile market is in turmoil after Iliad launched its ultra-low cost 'Free Mobile' service in January, touching off a price war that is making the three existing players structurally less profitable.

"I think it is in the interest of all operators to examine opportunities for network sharing given the new realities in the mobile market, and also to rationalise our investments, while keeping our capacity to differentiate ourselves via network quality," he said.

Network sharing deals have become more common in Europe's telecom sector in recent years as groups seek ways to cut costs to cope with a revenue slump brought on by new regulations and tough competition from Internet players like Google and Apple.

Vodafone and Telefonica's O2 announced in June that they would share a network in Britain to improve coverage and speed up the roll-out of a new superfast mobile service known as 4G.

On Thursday, Stephane Richard also said France Telecom was satisfied with the current organisation of the country's telecoms watchdog, ARCEP, and did not expect there to be a major impact on the sector if the regulator was merged with the broadcast regulator, the CSA.

France's Socialist government had said it would study proposals to combine the CSA and ARCEP with a decision to be made after late November.

"If this is just about making a single regulator with two separate committees overseeing the industry--one for media, one for telecoms--I do not see really what impact the move will have," said Richard.

"To me, it is more an effort to save resources even if there are certain issues the two sectors have in common." (Reporting by Alice Cannet; Editing by Leila Abboud)