Noticeably missing from all the stories about the Bouygues SA consortium winning the contract to build France’s third cellular network and run it for 15 years has been the shareholding split between the members of the consortium. When you see it, you realise that it was just too complicated for most people to get their heads around, but Reuters now has it straight. Bouygues has 74% and Jean-Claude Decaux SA has 26% of a new company, BDT, which holds 51% in Bouygues Telecom. Bouygues Telecom’s other investors are Cable & Wireless Plc with 20%, Veba AG with 15%, Banque National de Paris SA and US West Inc, each with 5%, and Paribas with 3%. Bouygues says it will invest about $250m over three years to build up the network, out of total investment over the 15 years of $2,640m. Of this amount, around $1,400m will be met from project cash flow, the partners will inject $580m of equity – implying that Cable & Wireless is in for about $116m – UKP73m, and $650m will be met from borrowings. Bouygues looks to win 2.5m subscribers out of a total market estimated at 10m in 10 years’ time. Cellular telephony in France currently has market penetration of just 1% of the population, compared with 9.9% in Sweden, 6.3% in the US and 3.4% in the UK, which is still growing fast. The Bouygues team hopes to launch the service on a test basis at the end of next year, with the Paris basin as its first catchment area – and showing that telecommunications competition doesn’t simply kill jobs in the former monopoly phone company, the new cellular system is expected to create 12,000 new jobs at the company and among resellers of the service. Not too surprisingly, the project is not expected to show an operating profit for three years, Bouygues Telecom chairman Philippe Montagner said.
