In April 2014, after a bidding war lasting weeks, Numericable – a Luxembourg-based cable provider largely active in France’s telecoms sector – was successful in its bid to purchase Vivendi’s French telecom subsidiary SFR.

As detailed in our article of 23 April 2014, with cable and mobile capabilities in Europe and the Caribbean, the acquisition of SFR will now allow Numericable to gain a strong wireless platform to provide a cable and mobile offering for SFR’s 25 million wireless and broadband customers.

Under the deal, Numericable will control the new company and Vivendi will receive a 20% interest in the newly established entity. The acquisition was apparently structured in this way in order to allay the regulator’s fears and address any issues that may arise as a result of the fact that Vivendi control the Canal+ Group who own 100% of Canal+, France’s premium pay television channel.

The French Authority (the “Authority”) is currently conducting an in-depth Phase II review of the deal. The Authority is said to have raised four main competition concerns, including: the situation regarding France’s pay-TV market; competition in the sector of Internet services and wholesale access to Numericable’s leading cable network; the combined market share of Numericable and SFR in the French island La Réunion; and, the market power of a combined Numericable/SFR entity in the business-to-business service sector. Discussions are ongoing about these issues but in order for the deal to receive merger approval by the end of October, as is hoped by Numericable, any remedies required by the French Competition Authority will need to be filed within 45 working days of the beginning of the 65 working-day in-depth review which started on 30 July. Otherwise, the Phase II review would be extended by 20 working days after remedies are formally filed.

France’s pay-TV market

Numericable has established itself as one of the largest providers of bundled television viewing packages in France through the build-up of distribution agreements with popular content providers including Canal+ and Universal. The concerns of other market players – including Orange - is that due to the stake Vivendi will hold in the new company created from the merger, Numericable may receive favourable access to Vivendi’s content including preferential terms for CanalSat’s pay-TV service.

Internet services

Discussions are also reportedly ongoing on the issue of whether or not Numericable will have to grant wholesale access to its high-speed broadband infrastructure. While many companies in the internet and telecoms sector are gradually creating their future fiber-optic offering, the concern is that Numericable’s faster internet cabling will create a competitive advantage for the merged entity in many parts of France. It should be mentioned that in spite a limited market share, Numericable has a significant advance on competitors which have just launched their fiber network. Further concerns have also been expressed by other market participants about the potential the deal creates for a bundled TV, internet and telephone product that will receive advantages from this existing infrastructure. The possibility, therefore, is that the French Competition Authority require Numericable to provide access to its cable network.

Combined market share in French overseas territories

Both Numericable and Altice have a strong presence in La Réunion, a French overseas territory in the Indian Ocean, as internet providers. This overlap will likely mean that one of either Altice or SFR will have to divest of an asset or assets on the island which is a concentrated market for telecoms.

Business-to-business services

One of the initial concerns raised by market participants when the merger was announced was the increased ability that the new entity will have to provide sophisticated telecommunications services in the commercial sector, including the Cloud and telephone / video-conferencing for business clients.

Both Numericable and SFR sit indeed in the top 3 of telecoms and data services providers to commercial operations in France. The deal will reportedly mean that they together control approximately 20% of the business-to-business sector.


While both Numericable and Altice have stated that they expect to receive merger approval by the end of October this year, the deal is certainly not without challenges for the French Competition Authority and the companies themselves. This does not mean that clearance will be refused by the Authority, but this would require remedies and negotiations in a tight time schedule as mentioned above. Still, Numericable can ask the Phase II-period to be suspended for up to 20 working days (“stop-the-clock”) to finalize remedies.

In any case, the areas of concern discussed above highlight the impact that the transaction may have on the French telecoms market and the potentially unappealing remedies Numericable may have to offer in order to gain the merger approval.