Bouygues Telecom, France’s third-largest mobile operator, said it is “deeply transformed”, and will draw on commercial momentum and a new business model to “return to sustainable growth”.

Its targets include “sales from network growth” of more than 10 per cent in 2017 compared to 2014, which will be achieved by adding one million mobile customers and one million fixed broadband customers over the next three years.

It reiterated that it wants to achieve an EBITDA margin of 25 per cent in 2017, as well as laying out a new target of 35 per cent in the longer term. EBITDA margin in 2014 was 18 per cent.  Another target is average annual capital expenditure of around €750 million for the coming years.

In August, bracing competition and consolidation setbacks did not stop the operator from talking up “improved” Q2 results, and making an upward revision to its full-year guidance.

Its revenue remained stable in Q2 at €1.1 billion, although it was down by one per cent to €2.2 billion in the first half of 2015.

It made a loss of €66 million in the first half of 2015, against a £5 million net profit in 2014 (a restated figure).

4G
The arrival of Free Mobile in France’s mobile market triggered harsh competition between the newcomer and the country’s three operators Orange, SFR and Bouygues Telecom.

Attempts at consolidation failed, leaving Bouygues Telecom to adopt a radical strategy last summer that involved job losses and a focus on 4G.

The operator said its 4G coverage will reach 99 per cent of the population by 2018 through an extension of the network from 15,000 to 20,000 base stations.

The aggregation of 800, 1800 and 2600 MHz frequencies will also provide “unrivalled speeds” of up to 300 Mb/s.

It added that the French telecoms market is experiencing an unprecedented acceleration in mobile data consumption thanks to the fast adoption of 4G and the continually improved power of smartphones.

“Bouygues Telecom has the necessary assets to drive its growth from this market trend and aims to make the best of digital technology and services accessible to as many people as possible,” it said.

It also said it adopted a “customer-centric positioning” at the end of 2014 through which it wanted to strengthen the quality of its customer.

This “differentiated” positioning and the quality of its 4G network has significantly reduced the churn rate in its customer base, it claimed, cutting it to 15 per cent lower than the 2011 level in the first half of 2015.

New business model
Bouygues Telecom said it rolled out two successive savings plans and their initial targets have been revised upwards without affecting customer service quality.

It said savings of €600 million were achieved in the mobile business between 2011 and 2013, double the initial target amount; and that savings of €400 million on both the mobile and fixed businesses will be made between end-2013 and 2016, €100 million more than initially planned.

Overall, savings of €800 million will have been made across all businesses between 2011 and 2016/17.

“In order to achieve these targets, Bouygues Telecom radically simplified its business. The number of offers and the brand portfolio, distribution networks and the organisation of support functions have been simplified and optimised, resulting in a significant reduction in structure costs, with notably the departure of over 2,000 employees,” it stated.

“Beyond 2017, Bouygues Telecom will be able to capitalise on this new model while benefiting from economies of scale. Productivity gains will continue to accrue, helping to stabilise operating costs despite the rise in the number of fixed and mobile customers.”

It believes its mobile base station sharing agreement with Numericable-SFR in non-dense areas will enhance network quality while generating savings of around €100 million per year on operating costs and capital expenditure from 2018.