September 25, 2014 / 5:45 PM / 5 years ago

UPDATE 1-Regulator allows Bouygues-SFR network deal to go ahead

(Adds details)

By Leila Abboud

PARIS, Sept 25 (Reuters) - France’s competition regulator rejected a request by Orange to suspend a mobile network sharing agreement between rivals Bouygues Telecom and SFR, saying it did not pose an immediate or serious threat to consumers or the sector.

The Competition Authority said, however, it would continue to examine Orange’s complaints in an in-depth investigation of the deal, under which the number two and number three mobile operators plan to share mobile towers outside urban areas.

“Nothing put forward by Orange indicates that there is a serious and immediate impact that would require the suspension of the agreement or its extension to 4G roaming, which remains limited in scope,” the Competition Authority said in a statement on Thursday.

A spokesman for Orange said on Thursday that it would appeal the decision before a Paris commercial court.

SFR and Bouygues plan to create a joint venture company to operate 11,500 mobile towers covering 57 percent of the population, eliminating 7,000 towers between them.

They will share cell sites and antennas, but not spectrum or core elements of the network, with the aim of reaping 300 million euros ($382 million) a year in cost savings by 2017-2018.

Bouygues and SFR’s plan will take several years to implement. Now that regulators have sided with them, they are expected to begin the lengthy process of taking down towers. Orange’s complaint had cast doubt over their ability to start the sharing project.

Orange is particularly worried about part of the agreement that allows SFR customers to roam on Bouygues fourth-generation (4G) mobile network from September through the end of 2016.

Bouygues has France’s broadest 4G coverage with 70 percent of the population covered as of July, compared with 30 percent for SFR.

Orange argued that SFR should not be allowed to benefit from Bouygues’ 4G network when it has been slow to build its own.

Orange has covered 66 percent of the population with 4G, while low-cost player Iliad has 24 percent coverage.

The competition watchdog rejected Orange’s request to block the 4G roaming on the basis that it did not include big cities and that SFR would only reach an additional 20 percent of the population through the deal.

Orange disputed those conclusions and said the watchdog had made “factual errors” in its analysis of the impact of the 4G roaming part of the network-sharing deal.

“The decision today is just a first step,” said the Orange spokesman, who declined to be named. “Orange will appeal; the competition authority will continue an in-depth investigation; and Orange also reserves the right to file further complaints if it sees SFR abusing the 4G roaming clause.”

The Paris court is expected to take about six months to review the appeal, while the competition regulator could take several years to complete its in-depth review. (1 US dollar = 0.7849 euro) (Editing by David Clarke)

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