Orange in talks with buyers of fibre assets to get Jazztel deal approved

PARIS, May 5 (Reuters) - Orange (Taiwan OTC: 4554.TWO - news) has already begun discussions with several potential buyers for parts of Jazztel (Other OTC: JAZTF - news) 's fibre network, which it has agreed to sell to obtain regulatory approval for the takeover of the Spanish broadband company.

Nicolas Laederich, an executive who handles regulatory affairs and competition issues for the French telecoms group, said the divestment would be paired with a promise to rent out capacity on the company's fixed network to whoever buys the fibre assets.

European regulators have asked Orange to make these concessions as a condition of approving the 3.4 billion euro ($3.80 billion) deal to acquire Spanish broadband company Jazztel. The arrangement would bring back a fourth national competitor to Spain's broadband market.

Sources told Reuters last Thursday that European regulators would approve Orange's takeover of Jazztel.

Laederich said Orange would sell about 720,000 fibre connections that Jazztel had installed in five cities including Madrid, Barcelona and Valencia. The company that buys the fibre assets will also have the right to piggyback on Orange-Jazztel's fixed network via a wholesale agreement so as to be able offer broadband nationally.

"We have already had contacts with several interested parties," the executive said by telephone.

"These remedies in no way undermine the attractiveness of the Jazztel acquisition for Orange."

About 60 percent of the fibre connections overlap with Orange's own network, he explained, and the goal of generating 1.3 billion euros in cost savings from the Jazztel deal remains.

Orange clinched the Jazztel deal so as to keep up with Spain's leader Telefonica and Vodafone, which both already had presence in mobile and fixed. Spain is now Orange's second most important market in terms of revenue and sales, after its home country of France. ($1 = 0.8941 euros) (Reporting by Leila Abboud; Editing by Andrew Callus)