Rampant competition in the French mobile market left its mark on Bouygues Telecom’s first-half 2014 results, as the operator reported both declining sales and profit.
Total sales fell by 5 per cent to €2.2 billion to end-June, while sales from the operator’s network sales were even worse – down 8 per cent to €1.9 billion. The difference between ‘total’ and ‘network’ sales is so-called ‘other sales’, which is mainly handsets, the company said.
The results were another demonstration of why the embattled operator pursued a consolidation strategy earlier this year, reportedly trying unsuccessfully for mergers with both SFR and Orange.
Ebitda was €332 million, a fall of $137 million from the first half of 2013. The net profit attributable to parent Bouygues from the mobile unit fell to €22 million from €49 million (a restated figure) in the same period last year.
Having failed in its consolidation efforts, the operator resolved to push ahead with its own turnaround plan that has involved redundancies and throwing its weight behind 4G, as well as pursuing growth in fixed broadband.
As proof of how the turnaround is working, the operator pointed to 16 per cent of its total customer base now on 4G, compared to nine per cent at end-December 2013.
The operator’s total contract base has grown over the past six months, although its pre-paid numbers have declined. The net effect is that Bouygues Telecom’s total base has fallen since end-December by 119,000 to just over 11 million.
For the third consecutive quarter, the operator was number one in fixed broadband in terms of net additions, it said. It acquired 102,000 new customers in the second quarter of 2014. It has a total of 2.2 million broadband users.