Frank Esser, chief executive of French mobile telephone operator SFR, a unit of Vivendi SA (VIV.FR), is to step down and will be replaced by Vivendi's CEO, Jean-Bernard Levy, the company said Monday.

In a statement, Vivendi said that Frank Esser will leave SFR, with Jean-Bernard Levy taking over his responsibilities with immediate effect, while remaining chairman of the management board and CEO of Vivendi.

The company added that "the outstanding work performed by Frank Esser and his teams have enabled SFR to become the largest alternative telecoms operator in France and even in Europe."

Levy recently said he expects SFR's operating margin to fall this year as a result of the competition from Iliad SA (ILD.FR), which launched its mobile telephone services in January significantly undercutting rivals' prices. The company lost 200,000 customers in the first weeks following Iliad's entry on the market.

-By Nadya Masidlover, Dow Jones Newswires; +33 1 4017 1740; nadya.masidlover@dowjones.com

(Inti Landauro contributed to this article.)

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