Vivendi's Levy sees pressure on SFR, mum on Vodafone talks

The French-based media and telecoms group Vivendi reported a 4.4 per cent net increase in profits for 2010, but warned investors to expect only a slight increase this year due to fierce competition and increased regulatory pressures.

The company's CEO, Jean-Bernard Levy, also told analysts that he had no comment on any negotiations to acquire Vodafone's 44 per cent shareholding in its operator, SFR, or even if any talks were underway. However, Levy said that if the deal with Vodafone went ahead regarding SFR, Vivendi would increase its dividend payment, according to Reuters.

While the company's results were boosted by growth at its Brazilian telecoms subsidiary GVT and U.S.-listed video-games affiliate Activision Blizzard, its fourth quarter EBITA was down 7.8 per cent as SFR came under increased price competition from rivals Orange and Bouygues Telecom. The Vivendi subsidiary also suffered from tariff cuts imposed by the EU, and has been forced to not pass on an increase in French valueadded tax following similar decisions by other French mobile operators. SFR posted a 1.2 percent rise in sales in 2010 to €12.6 billion.

As evidence of the pressure on its domestic operations, the company said that SFR's contribution to EBITDA was expected to decline further in 2011, with GVT in Brazil becoming the growth driver. Levy forecast that GVT could see revenues increase by between 35 to 39 per cent as it accelerates geographical expansion. The Brazilian subsidiary reported a huge increase in its fourth-quarter EBITA to €108 million, up from €20 million a year earlier.

For more:
- see this Reuters article
- see this Bloomberg article

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