SFR preparing for initial public offering: report

French mobile phone operator SFR is preparing to hold an initial public offering in late 2014 or early 2015, according to a report from Les Echos.

SFR (Paris, France) chairman Stephane Roussel told the newspaper that SFR must re-organize to be more independent from parent company Vivendi (Paris, France), with an IPO.

Roussel had been chief executive of SFR since June 2012, but relinquished that role in late May to Jean-Yves Charlier – a change in governance that appears to have been motivated by the prospect of “an initial public offering if market conditions permit”.

French mobile phone operator SFR is preparing to hold an initial public offering in late 2014 or early 2015, according to a report from Les Echos.

SFR (Paris, France) chairman Stephane Roussel told the newspaper that SFR must re-organize to be more independent from parent company Vivendi (Paris, France), with an IPO.

Roussel had been chief executive of SFR since June 2012, but relinquished that role in late May to Jean-Yves Charlier – a change in governance that appears to have been motivated by the prospect of “an initial public offering if market conditions permit”.

The operator has been hurt by the entry into France’s mobile market of Iliad (Paris, France), whose low-cost offerings have forced rivals to overhaul their tariffs or risk further customer defections.

“I fear we have not yet quite reached the bottom,” Roussel is quoted as saying by Les Echos in discussing the price of low-cost packages in France.

Last quarter, SFR reported an 11.4% drop in revenues, to €2.6 billion ($3.45 billion), due to the impact of price cuts, while earnings before interest, taxation, depreciation and amortization fell by 24.5%, to €702 million.

Roussel is hopeful that a transition to 4G technology will lead to some pricing improvement, saying he expects a 4G customer to spend as much as €10 a month more than a 3G one.

However, SFR faces having to make substantial investments in its 4G and fiber networks over the next two years, which could increase the financial pressure on the business.

SFR is aiming to extend 4G coverage to 30% of the French population by the end of this year and is also exploring ways of expanding its fiber network.

In April, it struck agreements with France Telecom (Paris, France) and the Ile-de-France region regarding the deployment of fiber-to-the-home technology, with the aim of covering all households and businesses in the region by 2020.