SFR and Bouygues expect network-sharing to save $405M by 2017-18

SFR and Bouygues expect network-sharing to save $405M by 2017-18French mobile phone operators Vivendi SA and Bouygues Telecom SA expect their recently announced network sharing agreement to save them 300 million euros ($405M) per year by 2017-2018.

SFR, which is scheduled to be separated from its parent firm Vivendi and smaller competitor Bouygues last week agreed to share part of their mobile phone networks. The deal will allow the two companies to cover more areas for less expenditure.

The network-sharing deal is part of SFR's plans to decrease its expenditure to preserve cash as it is struggling to deal with aggressive price wars and fall revenues. SFR Chief Executive Officer Jean-Yves Charlier said the savings would fully kick in from 2018.

Speaking on the topic, Charlier said, "We have an ambitious plan to re-position SFR, focused on cash flow and differentiating products. It will be up to investors to decide if this, as well as the French telecoms industry eventually being reshuffled, makes for an attractive equity story."

The two telecom operators will create a joint venture firm to operate 11,500 mobile towers and cover more than half (57%) of the country's  population. The agreement will enable them to cover more subscribers even as they will eliminate as many as 7,000 towers. They will thus be able to generate more revenue by spending less. However, the two companies will not share spectrum or core elements of the networks.

At 1132 GMT, Bouygues' stock was trading at 27.88 euros a share, down 1.8 per cent; while Vivendi shares were trading down 1.1 per cent at 19.72 euros apiece. The Stoxx600 Europe Telecom index was down 1.3 per cent.