SFR adds customers in Q3, but earnings and revenue slump

Despite cost-cutting by rivals, French operator SFR is managing to attract new customers. The company, France's second-largest mobile operator, said it added 86,000 net new customers in the third quarter, after losing 673,000 in the first half due mainly to the market entry of Iliad's Free Mobile.

While SFR, a subsidiary of Vivendi, reported that third-quarter revenues declined 8.9 per cent year-on-year to €2.75 billion, EBIDTA has plunged 16.6 per cent to €537 million.

However, the company has revised the fall in its full year earnings to be closer to 12 per cent, as against the previous forecast of a 12 to 15 per cent decline.

In operational terms, SFR said it only managed to add 40,000 new postpaid customers in the third quarter, compared to the 320,000 France Telecom's Orange contract additions achieved over the same period. SFR's postpaid customer base reached 16.454 million at the end of September, up 1.6 per cent year-over-year.

SFR also reported that mobile internet usage continued to develop strongly, with 47 per cent of its customers now owning a smartphone, compared with 37 per cent in the year-ago period.

However, this improved situation has failed to stem rumours that Vivendi is still looking to dispose of its telecom assets due to falling margins, according to Les Echos.

The conglomerate is already in talks to sell GVT Brazil and Morocco Telecom, with SFR turning down an offer from cable company Numericable. Speculation continues that rival Free Mobile continues to hold secretive talks with Vivendi executives about acquiring SFR, with Vodafone and Bouygues Telecom also mentioned as possible bidders.

For more:
- see this Vivendi statement
- see this Reuters article
- see this WSJ article (sub. req.)
- see this Les Echos article (translated via Google Translate)

Related Articles:
Report: SFR, Free Mobile discuss possible merger
Rumour Mill: Is Vodafone looking to acquire SFR?
SFR results hurt by domestic price war; Vivendi ducks break-up question
Rumour Mill: SFR faces €350M more in cost cuts by 2013
Vivendi takes knife to SFR projects, plans new strategy