Vivendi moving to licence Vodafone Live!

Vivendi Universal yesterday revealed that it was close to signing a key contract with Vodafone in an effort to show that the rivalry between the two companies was over. The media and telecoms group disclosed that its French mobile phone arm, SFR, will next month buy a licence to Vodafone’s Live! software for a “decent sum”.

Just a year ago, Vivendi and Vodafone were fighting for control of SFR, France’s No 2 mobile phone company, a tussle that Vivendi narrowly won by gaining a 56 per cent stake. Vodafone received the remainder. Since then, Vodafone has worked hard to charm Vivendi — including inviting M Fourtou to its yacht at the Monaco Grand Prix — with the aim of improving SFR’s income, and in the long run to convince the French group to sell it its prize asset.

Telecoms is now Vivendi’s most profitable activity. SFR and Cegetel, a sister fixed-line business, earned €984 million (£683 million) in the first half, up 32 per cent. Group operating income was €1.6 billion, up 34 per cent, although once financial charges were included the net loss was €632 million.

Jacques Espinasse, Vivendi’s chief financial officer, said the earnings growth at SFR and Cegetel justifed its decision to fight off Vodafone. Vivendi paid BT €4 billion to gain a majority holding last year, but could not prevent Vodafone expanding its own stake too.

Profits fell in most Vivendi media units. Universal Music, the world’s biggest music business, fell €42 million into loss, as internet piracy and poor releases hit profits. The exception was CanalPlus, the French pay-TV operator, which made a profit, of €245 million, for the first time since 1996.