Bouygues Telecom returns to network sales growth in Q3

Bouygues Telecom said it saw a return to revenue growth from its network operations in the third quarter of 2015 for the first time since the second quarter of 2011, after mobile and fixed network sales increased slightly to €978 million ($1 billion) from €975 million a year previously.

Total revenue in the July-September period of 2015 increased 4 per cent to €1.16 billion. The France-based operator attributed the growth in network sales to an increase in subscriber numbers and the stabilisation of fixed and mobile ARPU.

The telecoms unit of the Bouygues Group also reported an improvement in core profits, after EBITDA grew by €21 million to €242 million. The EBITDA margin was up two points year-on-year at 24.7 per cent. Current operating profit in the third quarter was €45 million, while the operating profit was €24 million after factoring in non-current charges of €21 million related to the rollout of network sharing with Numericable-SFR.

The improved quarterly results certainly reflect Bouygues Telecom's bullish stance about its future as a standalone company. The operator, which in June rejected a €10 billion takeover offer from Altice, has remained firm in its belief that higher sales and cost savings would help boost profitability in the longer term.

Bloomberg noted that the company is targeting EBITDA of €750 million in 2015 as a whole, up from €694 million in 2014.

Bouygues added 208,000 new mobile customers in the third quarter of 2015, reaching a total of 11.6 million at the end of September. The total number of 4G customers stood at 4.6 million by this point, accounting for 46 per cent of the mobile base excluding machine-to-machine (M2) connections. This compares with 26 per cent of the mobile customer base at the end of September 2014.

Bouygues Telecom was hit hard by the cutthroat mobile pricing that Free Mobile introduced on the French market in 2012. The company embarked on a major transformation programme to create a viable standalone business, and in October said it has already achieved higher cost savings than expected.

Iliad-owned Free Mobile, meanwhile, continues to go from strength to strength. In the third quarter of this year, mobile revenue increased by 11.4 per cent to €463 million thanks to a 20 per cent rise in service revenue and 390,000 net new subscribers. In the first nine months as a whole, mobile revenue increased by 16 per cent to over €1.3 billion.

The company now has 11.3 million mobile subscribers, representing a market share of 16 per cent. It said 4G users accounted for 2.8 million of the overall base. Iliad also said it added nearly 2,550 new sites in the first nine months of 2015, bringing its number of 4G sites in service to 4,648 and covering 57 per cent of the French population.

For more:
- see the Bouygues Telecom Q3 results
- see Iliad's Q3 results
- see this Bloomberg article

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