Belgacom reports slump in Q1 profits

Belgacom said its net income in the first quarter declined by to €171 million, down from €199 million in the year-ago quarter, and the company partly blamed regulatory pressures on its mobile business for the decrease.

Belgacom said European Union pressure to reduce voice and roaming prices caused EBITDA to decline by 3.2 per cent, while higher HR costs and an increased pressure on direct margins also contributed to the overall 6.1 per cent drop in EBITDA to €441 million. Total revenue was largely stable at €1.586 billion.

Furthermore, a new law in Belgium that limits the time customers can be locked into mobile contracts to six months has exacerbated competition on the market, according to Reuters. Total mobile revenue generated by its Proximus mobile service therefore declined by 13.6 per cent in the business unit and 9.4 per cent in the consumer unit in the first quarter, Reuters reported.

Belgacom said it is has focused on repositioning its mobile offer since the new law was introduced in October 2012.

"We are confident that our simplified mobile pricing plans recently launched on 1 April 2013, our refocus on prepaid and our attractive promotional campaigns, will further strengthen Belgacom's position in the Belgian mobile market," Belgacom CEO Didier Bellens said in a statement.

Converged service offerings, now being increasingly targeted by operators in Europe as a way of locking in customers and boosting overall value, will also play a growing role in Belgacom's future strategy. The company said it sold 22,000 more multi-play packs in the first quarter, with a total of 1.26 million sold.

Belgacom provides a large variety of ways to combine fixed and mobile voice and data services together with TV.

Separately, Swisscom also highlighted the multi-play approach in its first-quarter results. The Swiss operator reported a 28 per cent year-on-year rise in customers using bundled offerings such as Vivo Casa, which combines fixed-line access with telephony, Internet and TV and the additional option of a mobile line, Reuters reported. However, this record growth in customer numbers failed to offset weaker market prices, and net revenue fell by 2.4 per cent overall.

For more:
- see this release
- see this Reuters article
- see this Dow Jones Newswires article
- see this separate Reuters article

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