Europe’s race to strengthen its digital backbone gained new momentum in mid-October, as Nokia extended its strategic partnership with Vodafone and Vodacom to develop next-generation mobile networks across Europe and Africa. The move builds on Nokia’s recent agreed agreement with Vodafone Three – part of the continent’s largest privately funded telecom infrastructure project – reinforcing Vodafone’s ambition to deliver faster connectivity.
As Nokia’s Head of RAN, Mark Atkinson, has rightly noted, today’s networks must deliver “new levels of performance, trust, and resilience” to meet the demands of the AI-driven economy. Concerningly, Europe has fallen behind global leaders in the telecoms infrastructure needed to fuel innovation and competitiveness – a situation that the industry’s titans are aiming to reverse.
On 14 October, French telcos Bouygues Telecom, Iliad (Free) and Orange launched a €17 billion bid for most of Patrick Drahi’s debt-riddled SFR. This move reflects a broader industry push across Europe for scale amid rising costs, thin margins and weak headroom to invest in the continent’s lagging 5G networks. Moving forward, regulators must now strike a balance: enabling consolidation to boost 5G investment while safeguarding consumer interests.
SFR deal in spotlight
The three-headed bid for SFR by Bouygues Telecom, Iliad and Orange is fast becoming France’s telecom story of the year. If approved, the deal would be Europe’s second-largest in 2025, and a turning point for a sector whose leaders have long called for consolidation to spark network innovation in Europe. Defending their gambit, the French telco trio claims that the SFR acquisition would enable them to ramp up “investments in superfast network resilience, in cybersecurity and in new technologies such as artificial intelligence” while consolidating control over “strategic infrastructure in France.”
Under the proposed takeover plan, Bouygues would acquire 43% of SFR’s operations, with Iliad and Orange receiving 30% and 27%, respectively. More specifically, Bouygues and Iliad would absorb SFR’s enterprise, consumer and infrastructure operations, while the group’s radio frequencies would be divided among the three. Furthermore, Bouygues would take charge of mobile coverage in rural areas. Should the merger succeed, it would notably overhaul France’s telecoms landscape by returning the market to three national operators – reversing a decade of fragmentation since Free’s disruptive entry in 2012.
Yet this market shake-up is far from guaranteed. Just a day after the bid was submitted, billionaire entrepreneur Patrick Drahi – chairman and founder of SFR’s parent company Altice – swiftly dismissed the proposal. His rejection, confirmed in an internal email sent to employees by Altice France CEO Arthur Dreyfuss and seen by the Financial Times, has not, however, deterred the consortium. Bouygues, Iliad and Orange say they will “maintain their offer” and seek a “constructive dialogue” with Altice on the way forward.
Centrepiece of Patrick Drahi’s Altice strategy
In the coming days and weeks, France’s telcos should prepare for tough negotiations with Patrick Drahi, a famously hard bargainer who knows the value of what he holds. Indeed, the consortium’s offer falls well short of the price Drahi is seeking for SFR – the flagship of his Altice empire and the cornerstone of his debt restructuring strategy for Altice. Confronted with rising interest rates after years of heavy borrowing to expand the Altice empire, Drahi deems it the right moment to offload assets and renegotiate with creditors.
Earlier this year, Altice restructured its €24 billion debt load, one of the largest such operations ever in Europe. Approved by a Paris commercial court in August, the agreement has – as of 1 October – reduced Altice’s debt to €15.5 billion and given creditors a 45% stake in the company, with Drahi retaining a 55% stake. For Drahi, SFR is a vital asset in his bid to stabilise Altice and regain investor confidence amid tightening credit conditions and relentless market scrutiny.
Despite a year-on-year dip in revenue and mobile subscribers reported in August, SFR remains a heavyweight in French telecoms, with 19.3 million mobile and roughly six million broadband customers. It is therefore no surprise that Orange, Bouygues and Iliad are all circling to acquire valuable pieces of France’s number two telco. Crucially, Drahi is betting on this multi-buyer approach to maximise SFR’s sale value while sidestepping the regulatory hurdles a single buyer would trigger.
By shedding prized but struggling assets such as SFR, Drahi aims to trim Altice’s heavy debt load and restore profitability, positioning the group to emerge leaner and stronger in a sector now ripe for consolidation.
Political hurdles on horizon?
Major mergers like the proposed SFR buyout often reshape market expectations, lifting valuations and sparking investor appetite across the sector – as seen in the recent share price gains of Bouygues and Orange. Yet a transaction of this scale will face intense antitrust scrutiny before receiving an eventual rubberstamp. Regulators must strike a delicate balance: maintaining competition and protecting consumers from price hikes while recognising that excessive market fragmentation has long held back Europe’s costly 5G and fibre ambitions.
Responding to the SFR carve-up bid on 15 October, French finance minister Roland Lescure stressed that France’s “phone and phone contract prices are among the cheapest in Europe and the world,” and vowed that he would “be vigilant on the impact on prices for consumers and the impact on the quality of service,” adding that France’s competition authority would ensure consumers were protected. Yet, given the recent government instability in Paris, how a future finance minister might approach the SFR deal remains uncertain.
Beyond France, the European Commission could also weigh in. The SFR merger would only fall under Brussels’ jurisdiction if less than two-thirds of revenue were generated in France, but the deal’s multi-buyer structure adds complexity. Each bidder may require a separate filing, which could result in Paris and Brussels dividing review powers. Should the case land in Brussels, it will test whether the EU’s new competitiveness-friendly rhetoric around consolidation in strategic industries translates into action – or whether old regulatory reflexes still prevail.
Europe’s digital future depends on its ability to match ambition with action. Strategic partnerships like Nokia’s and bold consolidation moves in France show that the industry is ready to invest, but policy must keep pace. Looking ahead, EU and national regulators should prioritise innovation-friendly frameworks that enable scale, attract capital and secure Europe’s place in the global connectivity race.
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