Orange's Belgian unit Mobistar reported an unexpected increase in core profit for the first quarter of 2015 and achieved year-on-year EBITDA growth for the first time in 15 quarters.
The company said restated EBITDA increased by 5.6 per cent to €69.9 million ($76 million), which was above the €64.5 million expected in a Reuters poll of four analysts. Consolidated net profit was also up, growing by 28.6 per cent to €11.8 million, while the company reported a slight dip in service revenue of 2.8 per cent year-on-year to €270 million.
Jefferies analysts noted that the strong EBITDA was 6 per cent above consensus estimates, and said this development "is a surprise…the inflection coming earlier than expected."
The analysts commented that the company provided little information about why this increase had been achieved, but said it was likely driven by a slow down in marketing activity in the first quarter and cost-cutting measures.
Mobistar CEO Jean Marc Harion hailed the quarterly performance as a sign that Mobistar's strategy is working. The company also noted that it has maintained its previously announced outlook for the year at EBITDA of between €260 million and €280 million, Reuters noted.
Harion reiterated the company's plan to commercially roll out broadband internet and digital TV cable services once regulators have published wholesale tariffs "to finally open the fixed market and benefit all Belgian consumers."
The company was forced to stop marketing fixed services in 2013 after it said a lack of competition on the Belgian residential fixed market made it impossible to sell landline services to customers at a profit. However, it hopes that the deregulation of the cable market will enable to re-enter the fixed market.
Mobistar will be under increased pressure to offer converged fixed and mobile services following the announcement this week that KPN is to sell BASE Belgium to Liberty Global's Telenet for €1.325 billion, creating a new fixed and mobile player in Belgium.
Former incumbent Belgacom already sells packages of fixed and mobile services on the market.
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