European carriers flex their M&A muscle

Consolidation of the U.S. tier two telco market may be getting a lot of attention lately, but the recent merger of France Telecom and TDC's mobile/fixed-line networks in Switzerland illustrates that a similar wave is now emerging in the European carrier market.

Set on becoming a competitive threat to incumbent Swisscom AG, France Telecom's Orange Switzerland and TDC's Sunrise will merge their Swiss network operations to create a larger service provider with 3.4 million mobile customers and 1.1 million wireline and broadband customers. Under the terms of the agreement, Orange paid TDC, which will own a 25 percent stake in the new company, $2.26 billion for a 75 percent stake.

But France Telecom and TDC aren't the only European providers that have been bitten by the M&A bug. After a long and somewhat contentious battle, KPN finally reached a deal to purchase the remaining stake it has in VoIP wholesaler iBasis. Currently, KPN owns a 56 percent stake in the Burlington, Mass.-based company.  

For more:
- The Wall Street Journal has this article