Bouygues Telecom continues its recovery as Free powers ahead

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Bouygues Telecom and Free Mobile both reported strong results for the first half of 2016, with Bouygues stating it had returned to long-term revenue growth and Free Mobile continuing to pick up subscribers.

According to analysts from Jefferies International, Bouygues Telecom benefited from trends that were “much more robust” than Orange and SFR in the face of market promotions; that assessment also seems to apply to Free.

Bouygues Telecom, which has faced a difficult period following the arrival of Free Mobile and the subsequent mobile price war from 2012, said the recovery strategy it has been following for the last two years is now paying off.

The company, which provides fixed and mobile services in France, said revenue increased by 6 per cent year-on-year to €2.3 billion ($2.56 billion) in the first half of 2016. It noted that network sales rose for the fourth consecutive quarter, increasing by 5 per cent to €1.97 billion, while sales from its mobile network also returned to growth in the period and increased by 3 per cent.

EBITDA also grew strongly, rising 26 per cent to €408 million in the first half of the year, while the EBITDA margin on network revenue improved 3.6 percentage points to 20.5 per cent. The current operating result improved to a profit of €38 million compared with a loss of €54 million in the first half of 2015. The operating loss also fell to €5 million from €109 million a year previously.

The company added 322,000 contract mobile customers in the first six months, and also said it had 6 million 4G customers by the end of June. This accounted for 58 per cent of its total mobile customer base.

Looking ahead, Bouygues Telecom is maintaining its EBITDA margin target of 25 per cent for 2017. According to Jefferies analysts, the operator “looks on course to deliver (and possibly exceed) its reiterated 2017 margin target of 25 per cent on network revenue.”

Iliad-owned Free Mobile, meanwhile, continued to demonstrate traditionally strong growth in the first six months, again staking its claim as France’s leading recruiter of mobile subscribers in the first half of the year.

The operator said it gained almost 400,000 net additional subscribers in the first six months, and also said it doubled its 4G customer base to 4.7 million. The total mobile base stood at 12 million by the end of June, giving Free Mobile a 17.4 per cent market share. The company added that its 4G network now covered 69 per cent of the French population.

Revenue from Free’s mobile business increased by 10.6 per cent year on year to €973 million in the six months to end-June. Total group revenue including its fixed business increased by 6.3 per cent to €2.3 billion while group EBITDA increased by 11.5 per cent to €808.5 million. The profit for the period improved by 16.9 per cent to €190.4 million.

For more:
- see the Bouygues Group results statement
- see Iliad’s group results statement

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