French telecom and entertainment giant Vivendi beat forecasts in its first half result, bolstered by increased market share from carrier arm SFR.
It boosted net income by just 0.9% to €1.47 billion, thanks to a 64% hike in its interest payments to €220 million. Ebitda rose 12.9% to €2.9 billion, ahead of analysts’ expectations, Reuters said.
“Vivendi delivered a very solid performance in the first half of 2009 in a tough environment,” said CEO Jean-Bernard Lévy.
Sales for the half were €13.178 billion, up by 17% from the same period last year. Lévy said the economic slowdown was having a “real but limited impact” on the business which was benefiting from subscription-based models and innovative products.
“Our businesses are young and enjoy substantial growth opportunities due notably to the digital revolution,” he added.
Economic pressure which has forced consumers to stay home, resulted in a boost to Vivendi’s pay-TV and gaming divisions.
Telecom arm SFR, which contributed the largest share of revenue, beat forecasts thanks to an increased lead in mobile market share largely attributed to the iPhone launch.
But adjusted revenue 0.3% and mobile service sales were off 0.5%. The company warned that it expects SFR’s mobile services revenue to drop slightly in the full year as well.
Levy confirmed that the group would continue to look at acquisition opportunities in emerging markets, but he said any possibility of buying Kuwait-based MTC’s African operation, Zain, was now off the table. Levy also killed speculation that Vivendi would increased its 20% stake in NBC Universal.
Meanwhile, SFR has joined rivals France Telecom and Bouygues Telecom in lobbying the European Commission to get the French government to lower the entry price for the country's fourth mobile network operator.
The French government has set the stating price at €240 million. Levy told press that after paying € 619 million for their licenses, existing network operators feel cheated as the government is now selling spectrum at below market value.
“Does France really need a fourth operator while several other countries are moving from four to three? It has just happened in Australia, is imminent in Spain and the UK and may take place in the US.”