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Iliad owner coughs €2.3bn for Orange Switzerland

Telco shopping trip finally bears fruit for French biz bloke

Xavier Niel, the owner of French ISP and mobile phone company Iliad, is buying Orange Switzerland for CHF2.8bn (€2.3bn) from VC Apax Partners.

Iliad, under its Free Mobile brand, is a 3G and 4G operator but grew its mobile business through a 2G roaming deal with Orange and used aggressive pricing to grow its market share.

Niel’s private holding company, NJJ holdings will be buying Orange Switzerland and is part of an ambitious expansion strategy which saw the company swallow Monaco Telecom in April.

Niel recently failed to do an audacious deal with Deutsche Telekom to buy T-Mobile US for $15bn, and sniffed at the number three French operator, Bouygues, according to the Wall Street Journal.

This is a second bite at the cherry for the Swiss operator, as Neil lost out when Apax bought Orange Switzerland in early 2012 from Orange for €1.6bn.

We can expect there to be quite a few other operators on the NJJ shopping list.

Niel said: “NJJ Capital is a long-term strategic investor, owned and operated by telecom professionals with a proven track record whose goal will be to share and exchange best practices with Orange Switzerland management.”

While Niel didn’t use the Monaco telecom acquisition to start a price war, the same may not be true in Switzerland, where, as the smallest player in a significantly larger market than Monaco, there is a lot more to be gained from the marketing practices of Free. ®

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