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Bouygues Telecom to Buy KPN’s Simyo as French Competition Grows

Bouygues Telecom (EN) agreed to take over Royal KPN NV (KPN)’s Simyo mobile-phone brand in France, securing customers already using its network as competition grows in the country’s wireless industry.

The sale of KPN France, which operates Simyo as a mobile virtual-network operator using Bouygues Telecom’s antennas for a fee, will probably be completed this quarter, the Dutch company said today in a statement. Simyo serves about 180,000 French prepaid customers, it said. KPN, which is based in the Hague, and Paris-based Bouygues Telecom declined to disclose a price.

A fourth mobile-phone operator, Iliad SA (ILD), is scheduled to begin service in France next year. Iliad founder Xavier Niel has pledged to drive down prices in a market dominated by France Telecom SA (FTE)’s Orange, Vivendi SA’s SFR unit and Bouygues Telecom. Thorsten Dirks, head of KPN’s international mobile-phone unit, said on Nov. 30 that the French market is “difficult.”

KPN’s proceeds from the sale will probably be “relatively insignificant, less then 20 million euros ($26.2 million),” Victor Bareno, an analyst at SNS Securities, said in a note.

The Dutch company will remain active in France through its Ortel Mobile brand, another virtual network operator specializing in international calls that’s also present Belgium, Germany, the Netherlands, Spain and Switzerland, KPN said today.

KPN fell as much as 0.2 percent to 8.96 euros and was down 0.1 percent at 11:10 a.m. in Amsterdam. The stock has declined 18 percent this year. Bouygues SA, the French operator’s parent that’s also the country’s second-biggest construction company, gained 0.9 percent to 23.80 euros in Paris.

To contact the reporter on this story: Maaike Noordhuis in Amsterdam at mnoordhuis@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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