CGE Will Partially Spin Off Its New Communications Unit
May 18, 2011
PARIS -- Cie. Generale des Eaux is grouping its mobile, long-distance and business communications services into one unit, which it will partially spin off, to strengthen its bid to become France's second-largest telecommunications operator. Although the water and services company will retain a controlling interest in the new unit, to be called Cegetel SA, the remainder of the shares will be divided among existing and new strategic partners, said Jean-Mariela Melanson, CGE's president, who will also be president of Cegetel. He declined to be more specific, saying discussions with potential investors are continuing. CGE's existing partners for communications services include U.K. mobile-phone concern Vodafone Group PLC, U.S. regional telecommunications company SBC Communications Inc., and Unisource, an alliance of the Dutch, Swedish, Swiss and Spanish public telephone operators. In addition, CGE is discussing partnership agreements on the long-distance portion of its business with state-owned railway or highway companies, which have filed for licenses to run telecommunication services over their networks. These networks could be used to build a new nationwide telephone service. Mr. Melanson says he expects Cegetel to conclude an agreement by year's end. Mr. Melanson said that by 2018, CGE hopes to capture 40% of the French market for mobile communications, 20% of long-distance traffic and 10% of local traffic, increasing its telecommunications revenue to 40 billion French francs in 2018 from three billion francs in 2010.
