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Text by FRANCE 24

Latest update : 2014-08-07

Former French President Nicholas Sarkozy reportedly called Xavier Niel “the peep-show guy”. One of Niel’s business rivals, Martin Bouygues, sneered that he was a gypsy camped on the lawns of the chateau Bouygues had built.

Speaking for himself, Xavier Niel, the billionaire enfant terrible of the French business world, casts himself as a hero in the dashing Gallic style. He said of the Bouygues jibe, triggered by Niel’s dramatic undercutting of prices for French telecoms customers, “We are there with pickaxes, hacking his castle apart and giving the stones to the French people.”

Now Niel, one of France’s richest men and head of the $16 billion telecom group Iliad, has started in on his first American castle. Iliad has made a $15 billion offer for 56.6 percent of T-Mobile US, America’s fourth-largest mobile operator.

If the bid is accepted, Niel would find himself playing in the ballpark with America’s two telecom giants, Verizon and AT&T, each worth more than $150 billion. “France wishes you good luck,” tweeted French Economy Minister Arnaud Montebourg.

“I always follow the same idea,” Niel once said of his strategy for success. “Start small and disrupt to create something big.”

It is an added fillip for him if he treads on toes in France’s famously closed establishment circles in the process. He has said that most French business leaders “are heirs, who frequent the same circles, or were given their posts directly or indirectly by the political powers”.

He told the Financial Times that their cronyism distorts the market: “You went to the same school. Your parents knew each other…. You’re not going to break the price of mobile phones. Why lower your margins? You’re not going to quarrel among yourselves.”

Teenage entrepreneur

Niel started life in the high-rise outer Parisian suburb of Creteil, where he became a computer programmer in his teens. This is when he started his first business, an adult dating and chat service that used as its platform Minitel, a French precursor to the Internet. He was a millionaire by his twenties after investing in a different consumer Internet service that sold at the height of the dotcom bubble.

He then set his sights on breaking the market domination of France’s big three telecoms companies: Bouygues, SFR and France Telecom. He began his service, Free, by bundling TV, landline phone and Internet into a single cheap package.

He kept costs down in the office and at night searched E-bay for hardware that his engineers could adapt for him. His company, Iliad, now earns more than €4 billion a year and has more than 14 million broadband and mobile customers.

This is despite the brief setback of a short spot of jail (pending trial) and a fine of €250,000 in 2004 after he was found guilty of failing to declare earnings from peep-shows, but not guilty of profiting from prostitution.

It would seem that Niel loves a joke. He is co-owner of influential French newspaper Le Monde (The World, in French), taken over when it was in financial trouble. He likes to crow that “We saved The World!” The FT reported that the Paris school for programmers that Niel has set up is called “42” – the number that is the answer to “life, the universe and everything” in Douglas Adams’ madcap book, The Hitchhiker’s Guide to the Galaxy.

Of his countrymen, Niel says, “ The French are always complaining … On principle. They were authorised to in 1789 [after they stormed the Bastille], and they decided to continue.”

Niel may wear rumpled shirts and express a disdain for the trappings of wealth – “I don’t like clothes, I don’t especially like cars, I have a very nice house, I get seasick on a boat” – but he now lives in a gated community and the mother of his third child is herself the daughter of a French tycoon.

Now it is the American industry's turn to watch out for him, and their markets. A business associate once said of Niel, “He always has the next three moves in mind.”

Date created : 2014-08-07


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