France Telecom (FT) has posted third quarter revenues of EUR11.3 billion (USD15.7 billion), down 3% year-on-year after declines in sales in France and Poland more than offset gains from Spain, the Middle East and some African markets. EBITDA margin for the quarter stood at 35.4% of revenues, down from 36.6% a year ago. The telco is feeling the heat domestically after cutting prices and spending more on marketing as it seeks to lock in customers to longer contracts ahead of the launch of mobile services by rival operator Iliad.
FT also indicated that M&A activity is likely to slow following the acquisition of operators in Iraq, Morocco and the Democratic Republic of Congo during the last twelve months, which have helped put the company on course to doubling revenue from emerging markets by 2015. FT remains hopeful, however, of disposing of its Swiss and Austrian subsidiaries as it seeks to exit selected low-growth European markets.
On a positive note, the telco slightly raised its annual cash flow target for the year, saying that carefully managed cost controls coupled with a high proportion of subscribers on long-term post-paid contracts were helping it to survive the difficult economic conditions in Europe.