This article first appeared in The Edge Financial Daily, on January 7, 2016.

PARIS: France’s telecommunications giant Orange is in talks to buy its smaller rival Bouygues Telecom, both companies said on Tuesday, a move that would consolidate one of Europe’s most competitive telecoms marketplaces.

Orange, which is 20% owned by the French state, said it had “renewed preliminary discussions” with the Bouygues group, but stressed they were not bound to any time frame nor committed to “any particular predefined outcome”.

Analysts had indicated that Orange may be facing a crunch decision over whether to shore up its position at home by gobbling up a competitor, or expand its presence abroad.

News of the talks appeared to find favour on the Paris stock exchange, with telecom shares up on prospects of a condensing of the French market from four to three operators, which could help reduce pressure on prices.

But a leading French consumer association demanded safeguards that fewer operators did not translate into less competition and higher prices for mobile phone users.

A telecommunications consultant  has said he believed the French government would support the deal, but that it could prove hard winning over the European Commission. — AFP