French integrated operator SFR is planning an “adjustment of its cost structure” that will lead to annual operating savings of EUR500 million by the end of 2014, alongside a “significant decrease in variable costs”. However, it also said that in order to preserve its future growth opportunities, it will maintain an investment level of EUR1.4bn–EUR1.5 billion per year, “in particular in mobile broadband (4G)”.

No further details were issued on a strategic review that parent Vivendi has underway, although there has been speculation that the group may look to “de-emphasize” its telecoms operations, which are investment-heavy and lacking in scale. In a statement, Jean-Francois Dubos, CEO of the company, said today: “We will communicate on the group’s necessary evolution as and when appropriate.”

The Financial Times reports that Vivendi had said a “straight break-up” is “not something we can contemplate for the time being”, due to difficulties in assigning debt between the entities, while protecting the interests of bondholders.

According to figures released by Vivendi, for the first half of 2012, EBITA for SFR was EUR1.1 billion, down 10.3 percent year-on-year, on revenue of EUR5.8 billion, down 5.9 percent. Mobile revenue was EUR3.9 billion, an 8.8 percent decrease.

During the first six months of the year, the company has suffered from price erosion due to “the new competitive environment and to several price cuts imposed by the regulators”. As with its rivals, the company has seen its home market shaken-up by the launch of low-cost rival Free Mobile.

The company noted that in the second quarter, its contract customer base returned to growth, with 122,000 net additions driven by strong enterprise and M2M performances, as well as an improving trend in its consumer business.

As of the end of June 2012, its total customer base was 20.79 million, of which 16.41 million were contract customers – 79 percent of the total. Mobile internet use has also continued to grow, with 46 percent of customers having a smartphone (compared with 34 percent at the end of June 2011), and a 2.9 percent increase in first-half data revenue.

Vivendi said that SFR had “reacted quickly” to changes in the market, including adjustments to the Red and Formules Carrees propositions, the launch of its Buzz Mobile low-cost international rates, and the debut of a new prepaid range.

The group also owns Maroc Telecom, which saw a first-half EBITA of EUR463 million, down 12.8 percent, on revenue of EUR1.4 billion, up 0.1 percent. It noted “lower revenues in Morocco, in a competitive environment of persistent price cuts in the mobile segment, offset by the solid growth in the sub-Saharan African countries”.

The other telecoms asset in the portfolio is Brazilian fixed-line unit GVT.