FT Orange suffers Q3 domestic decline, iPhone blamed

France Telecom (FT) Orange reported a decline in third quarter revenues due to lower sales in its home market and the lack of an iPhone refresh. The new iPhone 4S didn't launch until the fourth quarter.

The company reported a decline in third quarter revenue of more than 2 per cent to €11.28 billion, compared with the third quarter of 2010. It also reported a drop in EBITDA by over 5 per cent to €3.99 billion compared with the same period in the prior year. Company officials said the disappointing results are due to poor domestic performance despite solid growth in FT Orange's emerging markets business in Africa and the Middle East.

FT Orange said that revenue was impacted by lower handset sales owing to the later-than-expected launch of Apple's latest iPhone 4S this month. The French market is also experiencing intense price cutting from all mobile operators prior to the introduction early next year of a fourth mobile operator, Free Mobile, owned by Iliad.

Commenting on the results, according to L'Express.com, Gervais Pellissier, FT's CFO, said that the fall in domestic sales of handsets represents more than half of the decline.

However, Pellissier told the Financial Times that consumers continued to increase data and text usage even if voice calls were declining in some countries. He revealed that the company had already sold 75,000 units of the new iPhone 4S, which should boost FT's fourth quarter results.

Commenting on wider economic concerns, as reported by Reuters, the CFO admitted that they could have a small effect next year on the carrier's enterprise business. But the FT exec argued that the company would be somewhat protected even if a new recession were to take hold in its key markets of France, the UK, Poland and Spain, since subscribers were mostly locked into long-term contracts.

Also of note, Pellissier downplayed that the company was looking to make any more major acquisitions or disposals in Africa or the Middle East, and excluded the outright sale of the enterprise division.

"With the recent deals in Congo, Iraq and Morocco, we have already practically reached our goal of doubling revenue from emerging markets by 2015," he told Reuters. "Our dedication to Africa is still important based on an idea of creating regional clusters."

For more:
- see this L'Express.com article (translated via Google Translate)
- see this Financial Times article
- see this Reuters article

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