(Recasts with increased bid for SFR on April 17, adds European

Commission quote)

By Gianluca Lo Nostro and Elvira Pollina

April 17 (Reuters) - A sweetened 20.35 billion euro ($24

billion) joint bid by Bouygues Telecom, Iliad-owned

Free and Orange for France's second-largest telecoms

operator SFR looks set to test the European Union's regulatory

resolve.

Regulators have long drawn a red line to maintain four

operators per country, resisting pressure for consolidation to

match more dominant U.S. and Asian competitors.

Each operator acquiring a portion of SFR will face a

separate antitrust review, an Orange spokesperson told Reuters.

The three companies submitted their joint offer to buy most of

Altice France's assets on Friday, after their earlier 17 billion

euro offer was rejected by SFR parent Altice in October.

A successful deal for SFR, which is backed by billionaire

Patrick Drahi, would shake up one of the most competitive

telecoms markets in Europe. Operators in France have been locked

in price wars for years, pressuring margins and revenue growth.

A European Commission spokesperson said it had not been

formally notified of the proposed transaction.

"If a transaction constitutes a merger and has an EU

dimension, it is always up to the companies to notify it to the

Commission," the spokesperson added.

WHAT IS AT STAKE?

EU antitrust regulators have imposed tough remedies and

outright blocks on telecoms deals that proposed reducing the

number of mobile network operators from four to three in a

single country market, with a view to safeguarding competition

and avoiding price increases.

However, a 2024 EU report on the bloc's competitiveness urged

regulators to ease a stance that had resulted in a highly

fragmented sector, and instead focus on helping businesses gain

scale and compete with U.S. and Chinese rivals.

This echoed some calls by sector CEOs for the EU to facilitate

mergers by assessing deals on a regional rather than national

level and to take into account investment plans.

The European Commission has been looking to pan-European deal

approvals to help boost scale, Reuters has reported.

WHO WOULD REVIEW AN SFR DEAL?

Acquiring Altice's French assets would likely face a review by

the European Commission, which has 25 working days after a deal

is filed for a first-stage review. It may extend by 35 working

days, to consider either proposed remedies or a member state's

request to handle the case.

Most mergers win approval, but occasionally the Commission

opens a detailed second-stage investigation for up to 90

additional working days, which it may extend to 105 days.

WHAT DOES THE FRENCH GOVERNMENT SAY?

Paris will play a key role in the event of a deal as the

French government is Orange's largest investor.

As a board member, its influence can extend to talks, which

could focus on job protection and the national interest.

Finance Minister Roland Lescure has said he will be

"extremely vigilant", particularly on prices and service

quality.

WHAT IS THE EXISTING FRENCH TELECOMS LANDSCAPE?

France has four telecoms operators, with Orange the market

leader. This means it would only be able to acquire the smallest

share of SFR, which has 19 million mobile subscribers and more

than 6 million fibre customers.

The French market has undergone many transformations, with

Orange itself being acquired by France Telecom in 2000.

In 2014, Vivendi sold SFR to Drahi's Numericable for 13.4

billion euros in cash and a 20% stake in the combined entity,

forming Altice France.

Altice closed a debt restructuring last year that left Drahi

controlling 55% of Altice France and creditors 45%.

Meanwhile Bouygues Telecom, which is seeking the biggest slice

of Altice's business, has expanded through its acquisition of La

Poste Telecom, adding 2.3 million customers in 2024.

Iliad entered the French market in 2012 under its budget

brand Free, prompting stiff price competition.

The three carriers have proposed acquiring most of SFR's

activities, except for its stakes in fibre assets and those in

French overseas departments and regions.