Just before the holidays, one of Europe’s top merger sagas of 2025, and the defining story of the continent’s telecoms industry, flared back to life as new interest emerged for France’s SFR.
n mid-December, French media reported that at least four non-binding offers had been submitted to Altice France for parts of the operator’s network, in a move likely to push Bouygues Telecom, Iliad (Free) and Orange to enhance their initial bid.
The battle over the French pearl of Patrick Drahi’s Altice Group is unfolding against a broader EU push to encourage consolidation in order to boost investment, innovation and competitiveness – an agenda which has already fallen significantly behind. With the French trio still holding back a second bid, the SFR deal will loom large as 2026 begins, carrying the potential to trigger a much-needed wave of consolidation in Europe’s fragmented telecoms sector.
Recap on Patrick Drahi’s SFR gambit
The SFR acquisition story began last October, when SFR’s three French competitors put a joint €17 billion offer on the table for most of the operator’s assets. Patrick Drahi, chairman of SFR’s parent company Altice, rejected it within hours, judging it far short of his expectations, before circulating an information memo to showcase the strength of SFR’s network arm, NetCo, and its corporate division, SFR Business. With this shrewd play, Drahi has signalled to Bouygues, Illiad and Orange that he is preparing the ground for a higher price.
Despite Drahi’s swift rejection of their offer, the telco trio has not lost interest in acquiring SFR via their proposed three-way split – an arrangement that could fly better with national and EU competition authorities. In late November, Iliad’s chief executive, Thomas Reynaud, said that the rejection had been entirely anticipated, while weeks later, Aude Durand, Iliad’s number two, told the Wall Street Journal that the consortium’s proposal still had “real potential” and was “well suited to current market conditions.”
Privately, the numbers were already moving. Although a suggested new bid before the New Year has not surfaced, sources close to the consortium have acknowledged the first offer had been “a little low,” and that their top-end valuation now sits at around €19 billion, implying an overall value for SFR of roughly €23.7 billion – just above the floor Patrick Drahi and his co-shareholders are willing to accept.
As the prospective buyers weigh their next move, Drahi has launched a parallel sale of SFR Business – a move designed to turn up the pressure on Bouygues and Free, which plan to split those enterprise activities between them. Meanwhile, four investment funds have filed non-binding bids for parts of NetCo, SFR’s network backbone. As one insider put it, if SFR Business is sold off, “there is no deal left for us,” making Drahi’s leverage unmistakable.
Learning from international consolidation experience
As negotiations over SFR grind on, France’s telecoms sector should be looking well beyond its own borders for guidance. What matters is whether the SFR deal strengthens competition, unlocks investment and improves service for consumers, with international experience suggesting that well-managed consolidation can do all three without entrenching complacent national champions.
The shape of the SFR deal has a clear international precedent. A major national operator preparing to transfer large parts of its business to its three largest competitors is exactly what Brazil faced in 2020 with Oi. At the time, Oi chose to sell its mobile network, customer base and spectrum for roughly €2.7 billion to TIM, Vivo and Claro as part of a major restructuring. That three-way carve-up is now widely seen as a benchmark transaction and is closely studied by French operators weighing their own strategic options.
Crucially, the Brazilian outcome turned out to be far more balanced than many had anticipated. According to Oliver Wyman, Vivo reinforced its leadership by gaining four market-share points within a year, while Claro added six and TIM five. However, none of the players pulled decisively ahead, with competition remaining robust and the gaps between operators narrowing, while both average revenue per user and growth improved across the market. The lesson for France is that with the right model, consolidation can strengthen an industry without skewing it.
Just as important was the regulatory framework that came with the Oi deal. Brazil’s competition authority notably approved the transaction only in exchange for firm commitments on investment and 5G deployment. “Concentrating the market around three players significantly expanded coverage and made a nationwide 5G rollout possible,” says Emmanuel Amiot of Oliver Wyman, adding that “aside from South Korea, Brazil has achieved the world’s strongest 5G penetration and is now the third-ranked country for speeds.” Five years on, the transaction is still widely seen as a success.
EU competitiveness funding at crossroads
Brazil’s decision to link consolidation to binding 5G investment offers Europe a reality check. More than a year after Mario Draghi warned that the EU was starving its own competitiveness, Brussels is still scrambling for funding. The European Commission has now proposed a European Competitiveness Fund to bring Draghi’s vision to life, but as Politico reported in December, its €450 billion spread over seven years would still cover less than a tenth of the investment gap Draghi identified.
In his landmark report on the future of European competitivenss, Draghi was clear that consolidation and scale in strategic sectors like telecoms is indispensable if Europe is serious about innovation. Indeed, with 5G forming the backbone of everything from artificial intelligence to advanced manufacturing, underinvestment in networks has become a direct drag on Europe’s long-term growth. Although the Commission has spoken often about modernising competition policy to reflect this reality, its credibility now rests on whether it is willing to apply that logic to real transactions rather than keep it confined to speeches.
While Patrick Drahi and his shareholders still have to settle on terms for SFR, Iliad, Orange and Bouygues have left little doubt about their determination to strike a deal. When they do, French and EU regulators should be prepared to move swiftly, drawing on Brazil’s blueprint as well as the experience of far more consolidated markets in the United States and China. If Europe wants world-class digital infrastructure, it must let consolidation finally do its work.