France’s Iliad booked an expected decrease in mobile subscribers in its home market in the first half of the year, while its bottom line continued to be hit by intense competition in the fixed market and costs related to expansion into Italy.

The company’s Free Mobile brand booked a 70,000 decline in its subscriber base in the first half of 2018. However, as Iliad noted in early August, the majority of churning subscribers were on €0-2 per month plans with numbers taking 4G packages up during the period.

Its decline was attributed to “heightened competition” for entry-level offerings, as the operator actively pursued higher value customers. This was the company’s first reported decline in subscribers since its 2012 launch, which shook the French mobile market and led to aggressive cost-cuts across the industry.

Iliad said despite a drop in users profitability had improved due to a “greater subscriber mix” and an increase in customers making calls within its own network.

While Iliad emphasised it was pleased with its performance in mobile, these gains were offset by escalating competition and frequent promotional offers from rivals in the French fixed sector.

In a statement, the operator said a new sales and marketing approach had been adopted from June to address “disappointing new subscriber figures in a fiercely competitive market”.

Italy
In late May, Iliad expanded into Italy with an aggressively priced opening promotion. In the first month of commercial operation 635,000 subscribers signed-up. By early August this had increased to 1.5 million subscribers.

Iliad has spent €164 million developing its Italian operation, including €73 million paid to Wind Tre for spectrum needed to set-up the service. As the commercial launch came towards the end of the reporting period the capex hit impacted its numbers, but the unit contributed limited revenue.

The company’s H1 net profit excluding one-off items was down 0.4 per cent year-on-year to €232 million on broadly flat revenue of €2.4 billion.