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Orange 3G Segments Up For Sale

February 25, 2003 - source: BWCS

Paris-based mobile group Orange is widely reported to be preparing to sell off its Dutch and Danish subsidiaries. The recent departure of the company’s deputy chief executive Graham Howe is thought to have cleared the way for a radical cost-saving restructuring. Howe was believed to be a strong advocate for holding onto all of Orange’s European subsidiaries. However disposals are no firmly back on the table as Orange’s parent, France Telecom, struggles to cut its €60 billion debt pile.

The sale of Orange Denmark and Dutchtone would save Orange an estimated €200 million per year. Although the two operations are ranked second and third in their respective markets in terms of subscriber numbers, both remain loss-making. In the year to 31 December 2002 Dutchtone raised €400 million in revenues, while Orange Denmark contributed just €241 million to the group’s coffers. In contrast revenues at Orange France and UK were €7.65 billion and €5.96 billion respectively.

Orange has already indicated that its 3G rollouts outside of the UK and France are on hold but the sale of two UMTS licensees following its withdrawal from the Swedish market would indicate a much more significant and permanent withdrawal from overseas 3G operations.

While it maybe too early to talk of potential buyers for the networks there are some obvious synergies. In the Netherlands O2 is also thought to be actively looking to sell or merge its operations. Meanwhile in Denmark Hutchison-backed Hi3G is currently the only 3G operator without a GSM network.

 


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