French media firm Vivendi has chosen cable group Numericable as the favourite for the sale of its telecom unit SFR. <br /><br />The decision is a blow to conglomerate Bouygues, which had also bid for SFR.<br /><br />Vivendi and Numericable will now hold three weeks of exclusive negotiations. <br /><br />The decision upset France’s industry minister Arnaud Montebourg who has openly sided with Bouygues. <br /><br />Before Vivendi’s decision was announced he said: “This poses a number of problems. Firstly, because Numericable is a small business in comparison to SFR. It’s a five billion euro business which is borrowing 10 billion to buy a business larger than it is.”<br /><br />Montebourg backed Bouygues’ bid to calm what he called “destructive competition” that has pushed mobile phone service prices down 20 percent in the past two years.<br /><br />A deal between Vivendi Bouygues would have cut the number of French mobile operators from four to three, but would have faced competition regulator issues. <br /><br />That would have slowed down a sale and Vivendi’s board made the choice that was likely to help it exit the cut-throat telecoms market as quickly as possible.<br /><br />Vivendi has seen profits fall at SFR since the price war in France trigged by the arrival of low-cost newcomer Iliad’s Free service in 2012.
