Bouygues Telecom expects EBITDA to remain stable in 2015 as France's third-largest mobile operator continues to implement its transformation plan to enable it to survive in a market with four mobile players.
According to parent company Bouygues Group, capex will rise slightly this year as the operator implements its network-sharing agreement with Numericable-SFR and expands its fixed network, while the outlook for 2016 is for free cash flow to turn positive again.
Last year was dominated by efforts to restore Bouygues Telecom's competitiveness following a ruinous price war sparked by Free Mobile; the company has been seen as a takeover target after suffering the most from the introduction of low-cost tariffs by Free, with Altice cited as the most likely buyer.
According to Reuters, Bouygues Group CEO Martin Bouygues nonetheless insisted that its telecoms unit could succeed on its own.
"We have been courted like other operators around the world," Bouygues said. "No deal talks are underway. The choice of Bouygues Telecom is clear and it is stand-alone."
In 2014, Bouygues Telecom said it achieved its target of a positive "EBITDA minus capex" item, which amounted to €10 million ($11.3 million) for 2014. Total sales fell by 5 per cent to €4.4 billion, while EBITDA decreased to €694 million from €880 million.
The company reported a current operating loss of €65 million and an operating loss of €62 million after factoring in non-current income of €400 million from litigation settlements and a non-current charge of €397 million for adaptation and other costs. It ended the year with 11.1 million mobile and 2.4 million fixed customers.
In the 2014 results statement, Bouygues did not comment on recent reports that Arcep's new president Sébastien Soriano has said that Bouygues Telecom's network-sharing agreement with Numericable-SFR "goes too far". France's telecoms regulator is set to gain new powers under the economic reform law, "Loi Macron", allowing it to amend the terms of such network-sharing contracts between operators, for example.
In comments emailed to FierceWireless:Europe, Orange welcomed the fact that Arcep plans to examine the agreement between SFR and Bouygues Telecom, noting that this agreement raises "important issues as it involves actors who have both already deployed networks on a large scale."
Orange added that the principle of infrastructure competition should characterise the French market, particularly in the context of the deployment of 4G.
Arcep's Soriano also said he intended to review the existing national 2G and 3G roaming agreement between Orange and Free Mobile that is due to expire in 2018. However, Orange pointed out that the contract has always been ring-fenced within a set timeframe, and should gradually expire by early 2018--the date from which Free has an obligation to cover 95 per cent of the population.
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