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EMEA: Hutchison, Orange promise more European consolidation

Leaders of Hong Kong-baed Hutchison Whampoa and France’s Orange each indicated that their companies will be looking for mergers and acquisitions in Europe in the near future.

The South China Morning Post reported that Hutchison Whampoa managing director Canning Fok Kin-ning said there were more acquisitions to come following the company’s deals in Austria in 2013 and Ireland in 2014.

“In Europe, we are doing telecommunications consolidation. This is a top priority for us,” Fok said.

Fok was speaking at a press conference about the restructuring of the Hutchison and Cheung Kong groups, the flagship companies of Hong Kong billionaire Li Ka-shing. When the restructuring is completed, acquisitions will be the next priority.

In Europe, Hutchison’s 3 Group has operations in Austria, Denmark, Ireland, Italy, Sweden and the U.K. In 2013, Hutchison bought Orange Austria for $1.53 billion, and in July 2014, it closed on a $919 million deal to buy Telefónica ‘s O2 business in Ireland.

One of Hutchison’s potential future targets includes Telefónica’s O2 business in the U.K. BT had considered buying O2, but dropped its interest in favor of buying the U.K. mobile operator EE, a joint venture owned by Deutsche Telekom and France’s Orange.

And the EE deal in the U.K. may spark a new deal in France. After the EE sale is finalized, Orange’s CEO Stephane Richard told Reuters that the company will look for more consolidation in its home market. France has four major operators: Orange, SFR, Bouygues Telecom and Iliad’s Free, and there is intense competition among them.

Following Altice’s Numericable acquisition of SFR from Vivendi last year, there has been speculation that Bouygues will be the next target for a merger or acquisition, but nothing has materialized. At the time, Richard said consolidation in the market was needed, but that Orange would not lead the move. The EE deal seems to have changed his position.

More telecom news from Europe, the Middle East and Africa:

Telecom Egypt signs $2.1 billion deal with Mobinil and Vodafone. Egypt’s primary fixed-line carrier signed a commercial agreement with mobile operators Mobinil and Vodafone to provide infrastructure and international calling services. The agreement is worth $2.1 billion.

EE reaches 7.7 million 4G customers. EE announced it has added 5.7 million 4G customers in the space of a year, pushing its LTE-based customer base to 7.7 million subscribers and setting what it called record growth for Europe. The total figure exceeded EE’s goal of 6 million 4G customers by the end of 2014.

Following the EE announcement, Vodafone UK CEO Jeroen Hoencamp seemed to counter EE’s claim to greatness by arguing that it was not the speed of the network, but the strength of the signal that matters.

“Wherever we build 4G, we’ve proved that we can deliver great, unbeatable 4G speeds and coverage, but it’s not a race to have the highest speeds because when it comes to mobile, speed only gets you so far,” Hoencamp wrote on the company’s blog.

European Commission launches consultation on 700 MHz spectrum use. The commission is seeking comments on the use of the spectrum band that is ideal for LTE deployment, but is also used by television broadcasters. To help reach the EU’s goal of achieving a digital, single market across the 28-member state body, the EU hopes to develop a coherent position on the band’s use. The consultation is set to run until April 12.

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ABOUT AUTHOR

Sara Zaske
Sara Zaske
Contributor, [email protected] Sara Zaske covers European carrier news for RCR Wireless News from Berlin, Germany. She has more than ten years experience in communications. Prior to moving to Germany, she worked as the communications director for the Oregon State University Foundation. She is also a former reporter with the San Francisco Examiner and Independent, where she covered development, transportation and other issues in the City of San Francisco and San Mateo County. Follow her on Twitter @szaske