Belgacom hails convergence strategy as key to positive Q2

Belgacom's focus on multi-play offerings of fixed and mobile voice and Internet services looks to be paying off as increased sales from residential broadband and TV services compensated for declines in its mobile revenues during the second quarter.

The company said it is now on track to meet full-year guidance after focusing on mobile acquisition tactics in the second quarter. Total revenue in the second quarter was down slightly by 1.7 per cent to €1.58 billion.

"Supported by our new attractive and simplified mobile portfolio launched on April 1, 2013, increased marketing campaigns and tactical handset subsidies, we regained ground and turned our mobile net adds back to positive," Belgacom CEO Didier Bellens said.

The company's mobile revenue trends remained fairly in line with the first quarter, Bellens added. "In view of current operational and financial achievements we are confident in reiterating our outlook for the year 2013," he said.

The news came as a relief to investors after rival Mobistar, which does not have a fixed network, cut its outlook for 2013. The company stopped selling fixed services in May, and has suffered from increased competition on the Belgian market that has seen prices for mobile voice and data traffic fall by 20 per cent over the past year, Reuters reported.

"[Belgacom's] numbers come as a relief," Kepler analyst Javier Borrachero told Reuters. "Having seen the collapse of Mobistar numbers, investors were probably expecting weaker numbers for Belgacom as well."

Belgacom said it added a net 93,000 private mobile customer contracts in the second quarter by lowering prices and selling deals combining mobile and fixed-line products. While mobile revenue fell by 7 per cent from private customers and 11.3 per cent from businesses, revenues from broadband Internet and digital TV rose by 5.4 per cent and 15.3 per cent respectively, Reuters noted.

Belgacom and Mobistar also compete with KPN's BASE on the mobile market. The Dutch parent company said core profit from BASE declined 26 per cent as revenues fell and it spent more on new products, according to Reuters.

For more:
- see this Reuters article
- see this Bloomberg Businessweek article

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