France Telecom, TDC merge Swiss businesses for $2.3 billion

France Telecom, the third-largest mobile operator in Europe, and the Danish telecom group TDC, agreed yesterday to merge their Swiss operations for a consideration of €1.5 billion (approximately $2.3 billion) which is to be paid to TDC, underscoring another consolidation move in the European telecom sector.

Through the deal, France Telecom's subsidiary, Orange Communication SA (Orange Switzerland) and TDC's Sunrise Communications SA (Sunrise) will combine to form the second-largest telecom operator in Switzerland to compete with the market leader Swisscom.

On closing of the transaction, France Telecom will own 75 per cent stake in the combined entity, while Sunrise will hold the remaining 25 per cent.

Copenhagen-based TDC is a leading provider of communications in Denmark with strong focus in the Nordic region (Denmark, Finland, Sweden, Norway and Iceland). Outside the Nordic region, its subsidiary Sunrise is a leading telecommunications provider in Switzerland.

Sunrise-Orange combination will account for approximately 38 per cent of the mobile-phone market in Switzerland with 3.4 million customers, and 13 per cent of the fixed broadband connections with 1.1 million customers.

At present, Bern-based Swisscom commands about 62 per cent of the mobile-phone market in the country, followed by Sunrise with 20 per cent and Orange 18 per cent.