Xavier Niel, the French telecoms magnate, made the most of the Olympics in his home city this summer, attending the opening ceremony, beach volleyball under the Eiffel Tower, equestrian events at Versailles and skateboarding at Place de la Concorde in the heart of Paris.
The Westfield shopping centres of publicly-listed property group Unibail-Rodamco-Westfield, in which he is a big shareholder, pulled in footfall staging sports activities at its eight malls in Paris and other French cities.
Niel even had a hand in the games hitting the right notes, as co-owner of the rights to 1970s disco staple Supernature, which pulsed through Paris as sports stars including Serena Williams and Carl Lewis took the Olympic flame on a boat down the Seine during the opening ceremony, as well as Frank Sinatra hit My Way, performed during the closing proceedings.
“I’m always happy to have these songs being played,” Niel told The Irish Times in an interview in Paris this week, in strongly-accented English, which is fluent, despite his claims otherwise.
As Paris struggles with a post-games hangover – with some temporary structures yet to be taken down, and a new government, recently patched together 11 weeks after inconclusive elections, only now getting down to dealing with France’s fiscal challenges – Niel has long gotten back to work.
The past five weeks have seen the 57-year-old, among other things: buy a mobile company in war-torn Ukraine; release a book, titled Une Sacrée Envie de Foutre le Bordel (A Real Desire to Cause Trouble), that traces his journey from humble beginnings to building a telecoms empire with more than 110 million subscribers across 23 countries in Europe and central and South America; and join the board of social media app TikTok’s Chinese parent company, ByteDance.
Worth €10.2 billion, according to Bloomberg data, Niel is one of your “always-on” kind of entrepreneurs. “What my team don’t like is when I’m out of Paris on vacation,” he says. “Because then I don’t have meetings – so, I can send them message all day long.”
Niel has also recently moved to increase his ownership of Eir, the former Irish telecoms monopoly in which two of his companies – Iliad, owner of Free, the French telco he built from scratch, and his NJJ private investment vehicle – bought a combined 64.5 per cent stake six years ago in a deal that gave Eir an enterprise value, including debt, of about €3.5 billion.
Over the summer, hedge fund Davidson Kempner sold its 8.9 per cent holding in Eir to the other New York-based legacy investor, Anchorage Capital. Anchorage recently began to sell down the combined 35.5 per cent stake to Niel.
Déjà vu?
Eir, the former State monopoly which has been through seven changes in control in the past 25 years, has distributed more than €2 billion in dividends to its owners since Niel led the takeover in April 2018. It equates to twice the €1 billion equity value of that deal.
There is a sense of déjà vu here. Eir has had a sad history of being something of an ATM for a series of owners in recent decades through financial engineering that ultimately led to it succumbing to examinership in 2012. That saw creditors write off €1.8 billion of its then €4.1 billion of debt pile and senior lenders taking control.
“Only [€2 billion]?!” he jests in a white and gold-panelled boardroom at Iliad’s headquarters, a late 18th-century neoclassical Paris mansion surrounded by a modern office building. “Why is it so small?!”
But he’s clearly prepared for the question. “We always invest as much as we [take] in dividends. Sometimes more,” he says. “We share what we do between three. First, the company and the people working in the company. Second, the customers. And third, the shareholder. It’s always what we do in all our countries and it’s one of our big secrets.”
The launch of Eir’s GoMo Sim-only service five years ago – with an introductory offer of a lifetime charge of €9.99 a month for all calls, texts and 80GB of data – shook up the market and triggered retaliatory moves by rivals.
Eir, which is currently spending €250 million a year on capital investment, said in August it had 1.2 million homes and businesses – serving about three million people – connected to its fibre network, with the goal of reaching 1.9 million premises by the end of 2026.
Niel says his team was first attracted to Eir because of its sorry state after years of being “not well managed”.
Under the Frenchman, Eir has transformed IT systems that hadn’t been updated since the 1990s, moved the company’s previously notorious outsourced customer service function – and other work – back in-house, while cutting running costs at the same time. (While call service indicators have improved under the current owners, Eir still topped the list of customer queries and complaints to the competition watchdog helpline last year.)
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Although Eir’s revenues have barely moved under Niel, its earnings before interest, tax, depreciation and amortisation (Ebitda) rose almost 20 per cent to €633 million over the past six years.
Asset sales under Niel include Eir’s mobile tower infrastructure and almost half of its wholesale broadband subsidiary. But it has also been a buyer, snapping up IT services provider Evros to broaden its offering for business customers.
When asked if he, too, will ultimately join the long cast of one-time Eir owners, Niel insists: “It will never be for sale, until the day I die.”
He highlights that he has only ever sold four telecoms assets – each for particular reasons – in over three decades in the sector.
He then launches into a moan about French inheritance laws, which dictate individuals must pass on 75 per cent of their estate to their offspring when there are three or more children.
Niel has four, though for some kind of privacy reason, he won’t confirm this. He has a daughter and son with his partner of a decade and a half, Delphine Arnault, daughter of LVMH chief Bernard Arnault, one of the world’s richest men (net worth: €176 billion), and chief executive herself of the fashion conglomerate’s Christian Dior brand. He also has two sons from a previous marriage, who work in his telecoms empire; one at Eir.
Niel has lobbied his government in the past to have the laws changed. “But the French people don’t want to change it,” he says. “They always think that they’ve some uncle somewhere in the world that they’re going to get some money from.”
Humble beginnings
Niel – described variously as France’s answer to Bill Gates, Mark Zuckerberg or Steve Jobs – presents himself as coming from the working-class suburb of Créteil to the southeast of Paris (where he picked up Arabic on the streets, though “only bad words”). But his father was a lawyer, who worked for a pharmaceutical company, and mother an accountant.
“I once told a journalist from the French newspaper Le Figaro that I was born into a poor family,” he recalls, “and my mother cried and she told me, ‘We gave you all we had’.”
Niel, who avoided university, learned computer programming as a teenager in the 1980s after his father gave him a Sinclair ZX81 – a machine with enough memory to store a short email today.
Using Minitel, France’s forerunner of the internet, the budding entrepreneur set up adult web chats, known as Minitel Rose, while still at school, before investing in peep shows and the like.
In 1993, Niel founded WorldNet, France’s first internet services provider, three years before incumbent France Telecom got in on the action. He went on to sell it in 2000, on the eve of the bursting of the dotcom bubble, for the equivalent of €58 million.
He launched Free, the world’s first triple-play package of phone, internet and television in 1999, before rattling the French market in 2012 with the unveiling of Free Mobile, offering unlimited calls and data for €19.99 and wooing customers by goading those on packages costing as much as €65 at rivals that they were little more than “suckers” or “milk cows”.
Niel often refers to himself as an “outsider” in his own country, where the establishment is populated by heirs to dynastic wealth who went to the same schools and whose parents knew each other.
Does it really stack up when he is co-owner of Le Monde, which sees itself as France’s leading paper of record; is on first-name terms with president Emmanuel Macron (who Niel refuses to criticise for calling the election that led to months of political stalemate: “If you like democracy, it’s never a mistake to call an election.”); and counts the most powerful chief executive in the country as his all-but father-in-law?
He deflects, drawing attention to his everyman attire, an open-necked white shirt paired with jeans. “Today I put on a shirt for you,” he says, “because I usually have a T-shirt. I usually have sneakers, but I put on boots.”
At an event last week in Paris to promote his new book – written in the form of interviews with former deputy mayor of Paris Jean-Louis Missika – one of the pearls he dropped was “go to jail”. It was an apparent flick at his brief stint in Paris’s Santé prison in 2004, after he was arrested on charges of aggravated procuring in connection with his part ownership of a chain of peep shows.
While the procuring charges would end up being dropped, Niel was convicted of concealing the misuse of corporate funds in relation to income from the shows. It resulted in a €250,000 fine and a suspended two-year sentence.
“It doesn’t translate well,” he says of the “go to jail” remark. “The title of the show was, How to Become a Billionaire, so it was more of a stand-up comedy thing. What I meant was, ‘make mistakes’.”
“People say, ‘Oh, you always succeed’. But, in fact, we are the biggest losers in the world. In France, we tried to buy the second-biggest TV channel, M6. We lost. We tried buy the third-biggest movie theatres group. We lost. We tried to buy Casino, which is a big retailer. We lost. We tried to buy T-Mobile in the US. We lost.”
However, when asked to name his biggest mistake, he struggles. “My mind always forgets bad things. I’m so optimistic,” he says.
He also suggests he’s the wrong person to give a realistic take, when asked for his views on seemingly intractable geopolitical matters like Russia’s invasion of Ukraine or Israel’s war on Gaza and conflict with Hizbullah.
“I always think things will be better tomorrow. When Covid [lockdowns] started, I was sure they’d last for one or two days. It lasted months,” he says.
It’s a disposition that prompted Niel to become one of the brave few entrepreneurs who have taken a bet on Ukraine since the war started 2½ years ago.
His NJJ lead the acquisitions and planned merger of one of the country’s largest fixed telecom and pay-TV providers and its third-largest mobile operators.
The mobile deal, backed by loans from the European Bank for Reconstruction and Development and International Finance Corporation, closed last month. (French executive Pierre Danon, who was chairman of Eir during one of its leveraged ownerships over a decade and a half ago, will chair the enlarged group.)
“I think we need to help this country and invest in it,” he says, adding that the total size of the deals, including planned investments, will likely top €1 billion.
He also accepts, he says, plans by the new French government to hike taxes on the country’s wealthiest individuals as it seeks to rein in a gaping budget deficit. But he takes issue with plans to levy more tax on big companies, insisting it will hamper investment.
While Niel’s focus has been on buying controlling stakes in telecoms companies internationally, he has also been known to take minority positions, such as the 2.5 per cent position he disclosed in Vodafone two years ago as he pursued a €10 billion-plus bid for the UK group’s Italian unit. Vodafone would choose an €8 billion offer from Swisscom earlier this year, saying it was simpler, offered more upfront cash and was less likely to be hit by regulators.
“We lost a lot of money [on Vodafone],” says Niel. The stake is reported to have cost him about £750 million (€891 million). It is currently worth £480 million.
Paris mansions
Outside of telecoms, Niel holds an impressive real-estate portfolio, spanning a number of Parisian mansions, such as the Hotel Lambert, bought for more than €200 million in 2022 from Prince Abdullah bin Khalifa al-Thani, deputy emir of Qatar, to a five-star hotel in the alpine ski resort of Courchevel.
Elsewhere, he is a cofounder of French media production conglomerate Mediawan and the lead investor in a group that took a 27 per cent stake last year in Swiss asset manager GAM, which is trying to turn itself around after a turbulent recent past.
The former hacker founded a not-for-profit computer programming school in 2013, called 42, which has 55 schools around the world; and set up what’s now the world’s largest start-up campus – Station F – in a converted railway depot in Paris seven years ago. He personally invests in 100-200 start-ups a year, he says.
More recently, he has been enthralled by artificial intelligence (AI) start-ups, including French AI research lab Kyutai, into which he pumped €100 million late last year.
“I don’t want my kids relying on [AI) products being created in the US or China,” he says. “I want European models created with European rules.”
Niel excitedly plays a recording on his phone of a colleague’s recent interaction with Kyutai’s new AI voice assistant, Moshi.
“Isn’t he terrible at speaking English?” the colleague is heard asking. The female synthetic voice replies: “Oh, you’re so funny. He’s not terrible. He’s just not very good, but he’s trying his best.”
CV
Name: Xavier Niel
Job: International telecoms tycoon whose companies, including Eir, have more than 110 million subscribers
Lives: Paris
Family: Partner to Delphine Arnault, chief executive of Christian Dior and an executive with the fashion brand’s parent LVMH, with whom he has two children; he also has two children from a previous marriage
Something you might expect: He says he loves the telecoms industry
Something that might surprise: He enjoys exploring the catacombs of Paris
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