As the telecom mobile market in France is saturated, with 147% subscription penetration of the population in 2021, Mobile Network Operators (MNOs) started pursuing inorganic growth strategies such as acquiring existing Mobile Virtual Network Operators (MVNOs).
SFR, in 2021, acquired a 50% stake in MVNO Afone Mobile. This acquisition allowed the telco to add 0.8m customers to its subscriber base in Q4 2021. Also, SFR is looking to strengthen its position in mobile and fixed services through the acquisition of the French telecom service provider, Coriolis Telecom, announced in September 2021. A EUR415 million acquisition that will add 0.5 million MVNO subscriptions to SFR’s base. The deal is subject to regulatory approvals and is expected to be finalized in the first half of 2022.
Another telco, Bouygues Telecom, completed the acquisition of MVNO Euro-Information Telecom in 2020. This allowed the telco to acquire over 2 million customers and expanded its distribution network to over 4,200 Crédit Mutuel and CIC bank branches with a large number of their customer advisers.
Over such operators’ M&A activity, the MVNO subscriptions market share of total subscribers dropped in 2021 to 5.28%, from 8.1% in 2020. Nonetheless, MVNO subscriptions share is poised to remain broadly stable through 2026, supported by the entry of new players like Zadarma, a cloud communication provider, that targets all customer segments with a special focus on the business segment. The new MVNO entered the market in January 2022 and started offering competitive plans. For instance, Zadarma is offering 50% discount on new subscriptions.
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