In a move that will consolidate a chunk of France's mobile phone operations, Bouygues Telecom has agreed to purchase Royal KPN (News - Alert) NV's Simyo mobile-phone brand. The deal will secure customers already using its network as competition is growing for France's wireless industry.
Dutch KPN said its sale of KPN France, which operates Simyo as a mobile virtual-network operator using antennas from Bouygues Telecom for a fee, will most likely be completed this quarter. Paris-based Bouygues and the Hague-based KPN did not disclose a price for the transaction.
Simyo currently serves around 180,000 French prepaid customers. KPN said customers will not be affected by the sale. Iliad SA is also scheduled to begin service in France next year, with its founder Xavier Niel pledging to drive down prices. The market is currently dominated by Bouygues in addition to France Telecom (News 
- Alert) SA's Orange and Vivendi SA's SFR unit.
According to Victor Bareno, an analyst at SNS Securities, KPN's proceeds from the sale will probably be “relatively insignificant, less than $26.2 million.” KPN plans to remain active in France via its Ortel (News - Alert) Mobile brand, a virtual network operator that specializes in international calls. That brand is also active in Belgium, Germany, the Netherlands, Spain and Switzerland.
On the news, KPN's shares fell. 0.2 percent and were down 0.1 percent today in Amsterdam. The stock has steadily declined 18 percent this year. Bouygues Telecom's parent company, Bouygues SA, which is also France's second-biggest construction company, gained 0.9 percent in the Paris market after the announcement.
The sale fits in with a strategy previously stated by KPN in which the company will focus on accelerating Ortel Mobile's growth outside of domestic markets. Last month, the company signed a partnership agreement with Spanish company Telefonica (News - Alert) for multinational customers with a focus on mobility solutions.
The agreement enables service provisioning to more than 1,200 multinational customers from both companies and spans more than 20 countries while incorporating key emerging territories. The companies plan to collaborate and support each other in the multinational segment, while also incorporating products and service development, SLAs, relationship and bid management and central reporting.
Edited by
Jennifer Russell
