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Watchdog raises possibility of rescinding Numericable-SFR green light

facade_campus_sfr_maxime_dufour__photographies_3France’s competition regulator is looking into a possible breach of conditions set ahead of cable operator Numericable’s acquisition of SFR, opening the possibility that the green light given to the deal could be rescinded.

The regulator required the sale by of Outremer Telecom, the main operator in Réunion and Mayotte, because the acquisition of SFR’s local operator would have given it a 66% market share in Réunion and a 90% share in Mayotte.

Numericable-SFR has begun the process to sell the unit, with Free, Réunion operator Zeop and Digicel identified as  possible buyers by French press.

However, Outremer Telecom raised its prices significantly at the beginning of January, leading to the suspicion that Numericable-SFR was encouraging subscribers to switch to SFR’s local subsidiaries, SRR and SMR, which are being retained by the combined entity.

The competition authority noted in its communiqué that it had the power to rescind its authorization of the Numericable-SFR acquisition, as it had done in the case of the acquisition of TPS by rival pay TV operator Canal+ in 2011, or to levy a fine of up to 5% of the company’s French domestic revenues.