Price cuts bite into Orange

29 Aug 2014

Matterhorn Mobile, which trades under the Orange Switzerland banner, has booked a 2.7% drop in turnover for the first six months of 2014 compared to the year-ago period, due primarily to falling ARPUs. On the back of revenues totalling CHF608.3 million (USD665.14 million), Orange booked EBITDA of CHF167.2 million, up 5.9% year-on-year, with EBITDA margin improving 2.2 percentage points to 27.4%. Price erosion, combined with the ongoing downward trend for SMS traffic saw ARPU continue to fall, dropping 8.4% y-o-y to CHF39.6 by end-June 2014. The impact of this slump was offset by growth in the operator’s subscriber base, which expanded to 2.18 million including 1.148 million contract customers.

Meanwhile, the cellco has continued to expand its 4G network, which now provides 85% of the population with access to theoretical peak download speeds of up to 150Mbps. Orange intends to increase coverage to 90% by the end of 2014. As at 30 June 2014, the cellco had upgraded 65% of its 3G sites to 4G and had rolled out 835 sites, 644 of which were 4G. Although the company stopped short of providing specific figures, Orange claims that 4G data usage per day per user had increased by 44% y-o-y, whilst there had been a 188% increase in active 4G-compatible devices on its network over the same period. The operator also completed a major overhaul to its IT systems in February 2014, with a view to improving quality of service (QoS) and customer experience through upgraded billing and mediation platforms.

Switzerland, Salt (Switzerland)