France Telecom’s chief executive has said an acquisition of Vivendi’s stake in Maroc Telecom would have “strategic interest” in an interview with France’s Le Figaro newspaper.
Stephane Richards said valuing the Moroccan business was out of the question, but that an acquisition could make sense for the French telecoms incumbent.
He acknowledged, however, that France Telecom (Paris, France) would struggle to fund a purchase given its current high level of debt and depressed share price.
French conglomerate Vivendi (Paris, France) is thought to be keen on selling a number of its telecoms subsidiaries and focusing resources on its core media interests.
It is in the process of selling GVT (Curitiba, Brazil), a telecoms business in Brazil, and speculation continues to surround SFR (Paris, France), its mobile-phone unit in France.
The company owns 53% of Maroc Telecom (Rabat, Morocco) and has reportedly provided financial information on the business to a number of parties potentially interested in buying it.
A purchase would help France Telecom to expand its presence in Africa and the Middle East, where it already operates across 16 countries and appears eager for Orange to be recognised as a pan-African brand.
This week the operator announced the launch of its Orange brand in the Democratic Republic of Congo, where it bought Congo Chine Telecoms (Kinshasa, DRC) in October 2011.
Yet Maroc Telecom’s faltering performance could dissuade interest. Last quarter, Vivendi reported a 4.7% year-on-year decline in Maroc Telecom revenues, to €665 million, and an 11.9% drop in earnings before interest, tax and amortization (EBITA), to €266 million.
Vivendi blamed successive cuts in mobile termination rates and the falling price of mobile-phone services for the revenue decline.
Costs of €72 million relating to a voluntary redundancy plan were partly responsible for the EBITA setback.
Vivendi said that 1,330 people had chosen “to benefit from this plan” by October 30.