FT Looks to Sell Swiss Biz
The French giant, currently on the hunt for more emerging market assets, announced the planned divestment as part of its latest financial results, which were a mixture of positive developments, such as customer growth in Africa and the Middle East, and not so positive developments, including rising operating costs that hit its profits. (See France Telecom Reports H1, France Telecom Battles Through 2010, Scrambling for Africa, M&A-Style and France Telecom Unveils New Strategy.)
And it seems other European holdings could be on the block too.
This isn't the first time France Telecom has tried to shift its Swiss operation. The carrier was close to merging Orange Switzerland with rival Swiss operator sunrise (really, with a lowercase s) in early 2010, but the deal was squashed by the country's regulator. It was at that point that France Telecom pledged its commitment to its Swiss business. (See FT, TDC Terminate Swiss Merger.)
Sunrise was subsequently sold by its then owner, Danish incumbent TDC A/S (Copenhagen: TDC), to a private equity firm for US$3.2 billion. (See TDC Sells Swiss Sunrise for $3.2B.)
Now Orange Switzerland could follow in its footsteps: "Following the review of its European asset portfolio it has begun the process for a potential disposal of its consumer business in Switzerland. The Board of Directors will take a decision on the divestment in light of the quality of offers received."
According to France Telecom figures made public today, Orange Switzerland has 1.57 million mobile customers, of which 642,000 are "mobile broadband" (3G) customers, along with 9,000 fixed broadband customers. It generated revenues of €469 million (US$670.7 million) during the first six months of 2011.
Analysts cited by Reuters and Bloomberg estimate the value of the business between €1.4 billion and €1.5 billion (US$2.0 billion and $2.14 billion).
In addition, analysts believe France Telecom might look to bank about €500 million (US$715 million) from the sale of its 20 percent stake in Portuguese carrier Sonaecom and 35 percent stake in Austrian mobile operator ONE Mobil .
— Ray Le Maistre, International Managing Editor, Light Reading