Tough competition at home hits FT-Orange results

26 Jul 2012

France Telecom-Orange (FT-Orange) has posted second quarter revenue of EUR10.9 billion (USD13.2 billion), down 2.1% year-on-year on a comparable basis, while earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 6.5% to EUR3.6 billion. The company was hurt in its domestic market by intense competition triggered by the arrival of Iliad’s Free Mobile, a new low-cost cellco. Orange France lost 155,000 mobile subscribers during the second quarter, an improvement on the 615,000 lost during the first quarter. Overall revenues in France were down 2% year-on-year. The company’s Spanish unit fared better, enjoying strong growth with sales up 4.8% for the first half of the year, while revenues from Africa and the Middle East climbed 6.2%. In May the telco stated that tougher competition in France meant it would not hit the goals laid out for 2013-2015; FT-Orange plans to update those targets after its third quarter results.

Commenting on the results CEO Stephane Richard said: ‘Against the backdrop of a difficult macroeconomic environment, I would like to emphasise the robustness of our first-half results, particularly the resilience of our French mobile operations which showed a marked improvement from the first quarter with a return to growth in the contract customer base in June. Spain and the emerging countries continued to underpin the Group’s performance with revenue growth in the first half of 4.8% and 6.2% respectively. We are continuing the deployment of our very fast broadband and 4G networks, the engines of our future growth.’

Meanwhile, Richard told the Financial Times that his company is looking closely at acquisition opportunities in Europe. ‘I am not saying that we are going to buy everything, of course, but we will see and follow closely the situation in the big European markets where we are,’ he said. The executive did, however, rule out talk of a possible merger with German giant Deutsche Telekom.

France, Orange Group