In an effort to head off objections to the merger of SFR with its own mobile unit, Bouygues is offering to sell its network infrastructure to a rival.
SFR is France's second biggest telco. In recent months, its parent companyto focus on its media business. Vivendi has for a controlling stake in the mobile provider.
Both offers are now being considered by Vivendi, with SFR likely to end up merged with either Altice's cable company Numericable, or Bouygues own mobile subsidiary, Bouygues Telecom. The latter would see France's mobile operators cut from four to three – a situation unlikely to thrill competition watchdogs.
To smooth the way, Bouygues is tackling competition concerns by beginning to talks to sell mobile infrastructure to Free, France's smallest and youngest operator which has been shaking up the market in recent years.
The pair announced on Sunday they had entered exclusive talks over the sale of network infrastructure and spectrum for €1.8bn, with the sale dependent on the SFR merger going ahead. The move would give Free, owned by Iliad, its own network; the company currently uses Orange's infrastructure.
"I welcome this agreement, since it means we can go to the Competition Authority with a plan for a merger between SFR and Bouygues Telecom which now includes measures that ensure strong, infrastructure-based competition on the French mobile phone market," said Martin Bouygues, the founder of Bouygues.