Bouygues sees improving trends at telecoms unit in Q1 2016

Bouygues Telecom reported good commercial performance in the first quarter of 2016, and said it is on track to return to long-term growth in sales and profits.

In its first set of results since the collapse of merger talks with Orange, the France-based mobile and fixed operator was in bullish mood and claimed that the first-quarter results confirm a turnaround that started in 2015.

First-quarter 2016 sales grew 6 per cent year-on-year to €1.13 billion ($1.28 billion) while EBITDA increased by €28 million to €146 million. Although the company still posted a current operating loss of €33 million, it noted that this was an improvement on the €62 million loss posted in the first quarter of 2015. The net loss improved to €40 million from €49 million in the first quarter of 2015.

Capital expenditure is expected to reach €750 million to €800 million in 2016 and the operator noted that the rollout of network sharing with the Numericable-SFR group will contribute to an expected non-current charge of around €270 million in 2016.

Looking further ahead, the company is maintaining an EBITDA margin target of 25 per cent in 2017.

In terms of customer growth, the operator added 240,000 mobile customers in the first quarter of 2016, giving a total of 12.1 million mobile customers at end-March 2016. Some 5.6 million of these were 4G customers, meaning that 4G now represents 55 per cent of its mobile customer base.

Bouygues Telecom continues to compete in a market of four mobile players after talks on a potential merger with Orange finally collapsed in April. At the time, Bouygues Group said its telecoms unit would resume its previous strategy as a standalone operator, and noted that this strategy had already resulted in a return to growth in sales and EBITDA in 2015.

Since then, the company has pressed ahead with more 4G developments: it commercially deployed its first 4G site in the 700 MHz band in Paris in April. It is targeting 4G network coverage of 99 per cent of the population in 2018.

For more:
- see the Bouygues results statement

Related articles:
France's mobile market shows modest SIM card growth in Q1 2016
Arcep report shows continued slowdown in French mobile revenue decline in Q4 2015
Bouygues, Free first to win permits for 4G sites in France's 700 MHz band
Bouygues Telecom reverts to standalone strategy after Orange talks collapse
Iliad's Free continues unstoppable growth in France's mobile market