Earnings at France Telecom (Orange) dipped 7 percent in Q1 due to a “turbulent” French market caused by the launch of low-cost rival Iliad at the beginning of the year.

Group EBITDA fell to EUR3.4 billion from EUR3.7 billion a year earlier, while revenue declined 1.8 percent to EUR10.9 billion. French sales, which account for almost half of the group’s total, fell 4.2 percent to EUR5.4 billion.

The launch by Illiad’s Free Mobile in January was responsible for Orange losing over 600,000 mobile customers in France during Q1, but the operator also noted that a national roaming contract signed with the new entrant partially offset the decline in domestic revenue.

Orange’s share of the French mobile market declined 1.5 percentage points in the period but the operator claims that since mid-March the number of portability requests has returned to the levels seen in the previous quarter.

“In a particularly turbulent French market due to the arrival of the fourth mobile operator, the response from Orange was rapid, pragmatic and effective,” said CEO Stéphane Richard (pictured).

He noted that Orange France’s new web-only brand, Sosh – launched as a direct challenger to Free Mobile – has attracted over 200,000 customers to date.

Elsewhere, Orange reported a 2.3 percent rise in sales in Spain (to EUR981 million), and a 3.4 percent decline in Poland (to EUR832 million). The group’s Rest-of-the-World unit saw sales rise 2 percent (to EUR2.1 billion) on the back of a 6.8 percent rise in Africa and Middle East.

The group had 225 million customers at the end of Q1 (excluding MVNOs), a 5 percent increase year-on-year, including 166.2 million mobile subscribers, an increase of 7.1 percent.