SFR is to pay cash for the acquisition, which is expected to be completed later this month following a green light from French competition authorities.

Tele2 will retain control of its mobile phone operations in France.

The Swedish group said it would book a capital loss of 107 million euros and a goodwill writedown of between 320 and 375 million euros.

SFR said in a statement that the transaction would bring it nearly 300,000 high-speed Internet clients as well as 3.0 million fixed line customers.

It added that the two activities generated sales of 260 million euros in the first half of 2006.