Neuf Cegetel Group (Euronext: NEUF) plans to raise up to €1 billion (US$1.27 billion) from an initial public offering (IPO) of its stock on the French Euronext exchange before the end of 2006, the company announced Friday.

It plans to float 20 percent of its shares to raise between €500 million ($635 million) and €1 billion. The operator said it has filed its IPO documents with l’Autorité des Marchés Financiers (AMF) and looks to join Euronext before the end of the year, subject to market conditions and approval from the AMF.

The move will aid its expansion program, which includes the planned acquisition of AOL Inc. (NYSE: AOL)'s French broadband business, which is set to cost up to €350 million ($445 million).

The French competitive operator is AOL's preferred buyer for its French assets, beating out competition from the likes of Telecom Italia (TIM) . AOL is looking to sell all its European broadband assets. (See Neuf Cegetel in AOL Talks, Telecom Italia Bids for AOL Units, and AOL Mulls Euro Broadband Exit.)

Buying the AOL assets would add more than 500,000 DSL customers to Neuf Cegetel's current 1.4 million broadband users, enabling it to hit the 2 million mark by the end of the year, the company says. That would take its DSL market share to around 18 percent.

Neuf Cegetel, which was formed in 2005 following the merger of two alternative carriers, will be looking to emulate the success of broadband competitor Iliad (Euronext: ILD), which had a spectacular IPO in January 2004 and has since tripled its share price. (See French Carriers Announce Merger and Iliad's Free Strategy Pays Off.)

Its IPO news comes as the company reveals its earnings report for the first half of the year. The carrier, which provides services to other carriers and enterprises as well as consumers, reported net income of €107 million ($136 million) from revenues of €1.42 billion ($1.8 billion). That compares with a net loss of €32 million ($40.7 million) from revenues of €1.38 billion ($1.76 billion) a year earlier.

At the end of June the company had more than 3 million customers, including 124,000 enterprise and 200 carrier customers. It operates its own 45,000-kilometer national fiber network, and has deployed its own DSLAMs in more than 1,000 of Orange (NYSE: FTE)'s local exchanges. (See Redback Wins at Neuf Cegetel, Ciena Wins neuf cegetel Deal, Neuf Says Bonjour to ADVA.)

That has enabled it to launch its own broadband services, including IPTV and VOIP. The operator has also launched a fixed/mobile convergence service called Neuf Talk Mobile. (See Neuf: Time Is Right for IPTV, Neuf Cegetel Offers Quad, and Neuf Uses Nortel for VOIP.)

It also has wireless broadband aspirations, having been awarded 3.5GHz band licenses in France's two most wealthy regions, Paris and the Côte d'Azur (Southeast France, including Nice and Cannes).

— Ray Le Maistre, International News Editor, Light Reading