Orange CEO Says Mergers Off Table as Carriers Focus on Networks

(Bloomberg) -- Orange SA Chief Executive Officer Stephane Richard poured cold water on speculations about deals in Europe’s telecom industry, saying carriers are more focused on investing in networks than merging.

“Most of the consolidation is over,” Richard said in an interview with Bloomberg TV at the World Economic Forum in Davos, Switzerland. “We had some mobile-to-mobile, mobile-to-fixed consolidation in Europe -- I don’t expect any new round of consolidation."

As European carriers are facing rising competition in phone and internet services from technology giants, a cross-border deal could be seen as a way to squeeze more profits from bigger scale. Le Monde reported this week that Orange and Deutsche Telekom AG discussed a possible tie-up last year, but after studying a merger between equals over several months, the talks ended in September because any deal would have resulted in an outright takeover of the French carrier.

"Now we’re much more focused on investing, into preparing 5G, investing into fiber, maybe investing into new areas of services to be in this user interface battle which is so critical,” Richard said. “I don’t expect further consolidation.”

Shares of Orange rose 0.2 percent to 14.71 euros at 9:23 a.m. in Paris.

To contact the reporters on this story: Alexandre Boksenbaum-Granier in Paris at aboksenbaumg@bloomberg.net, Francine Lacqua in London at flacqua@bloomberg.net.

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Ville Heiskanen

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