France Telecom Orange reported slightly downbeat full-year 2011 results, despite a surprising increase in revenues from Spain.

Group revenues fell 1.6 percent year-on-year to €45.3 billion while profit remained flat at €3.8 billion, excluding the impact of discontinued operations.

The company’s Spanish business unit reported a 4.5 percent rise in revenues to €4 billion – an impressive performance given the country's troubled economy that has caused losses at rival operators.

 

FTO said growth there was driven by increases in the contract customer base, data penetration and MVNOs.

“I am more convinced than ever that Orange, which has returned to fighting form, will set itself even further apart in the months to come by relying on its excellent fundamentals: its networks, its capacity for innovation and, of course, the teams which serve our customers,” CEO Stephane Richard (pictured) said in a statement.

The France-based operator increased its overall customer base to 226.3 million, led by rapid growth in mobile services in Africa and the Middle East.

However, its Rest of the World business unit registered a 0.9 percent decrease overall to €8.8 billion.

Sales were also down in its home market of France – they fell 3.3 percent to €22.5 billion – although mobile revenues increased by 0.8 percent to €10.9 billion.

Revenues were also down in Poland – they declined 4.1 percent to €3.6 billion – and enterprise, which fell 1.6 percent to €7.1 billion.

Against these declines, FTO continued to invest; capex increased 3.3 percent y-o-y to €5.8 billion.

The company’s networks were the main beneficiaries, capturing 55 percent of the overall capex budget. Customer premises equipment, such as set top box upgrades, saw the highest rise in capex during the year.

FTO is also hoarding cash – it has €8.6 billion, up from €4.9 billion in 2010, in preparation for what CEO Stehpane Richard said would be a “much tougher” 2012 than initially expected.

He highlighted forecasted downgrades on countries in which the company operates, continued regulation and competition as the main challenges.

Such problems are unlikely to arrest a worrying decline in the company’s share price – it fell 25 percent in 2011 and has fallen further since the turn of the year.

Savings are, consequently, on the agenda. The BUYIN procurement joint venture FTO established with Deutsche Telekom, for example, is expected to deliver opex savings of €200 million this year.

The company added it had no significant cash allocated to further acquisitions.

Instead, Richard promised to continue to spend in house; he said the company would double its investments in FTTH during 2012.

The company also played down the impact that the launch of rival Free Mobile has had on its business.

FTO said its mobile subscriber base had declined by 201,000 as of 15 February – Free launched on 11 January – which represented 0.7 percent of its total mobile customer base in France.

Encouragingly, Richard said the company would focus on quality of service (networks, shops, call centers, field intervention) to differentiate and justify a price premium on its core offers.

However, growth in the short term looks hard to come by; FTO said using its SOSH digital mobile brand as a “retaliation tool”, a focus on value management, increases in fixed line revenues and cross selling would drive growth.

A steady, unspectacular year would appear to be the best the company can hope for.

More Features

Opinion: Key takeaways from the current IoT hype Opinion: Key takeaways from the current IoT hype By Adrian Baschnonga, Global Telecoms Lead at EY The Internet of Things is maturing rapidly as a widening ecosystem of carriers, technology providers and start-ups look to take advantage of the world... More detail
Orange plays it safe with connected objects, mobile banking focus in new strategic plan Orange plays it safe with connected objects, mobile banking focus in new strategic plan Operators are often referred to as oil tankers – big behemoths that take forever to turn around. More detail
Deutsche Telekom looks to the Netherlands, UK in bid for connected home leadership Deutsche Telekom looks to the Netherlands, UK in bid for connected home leadership Deutsche Telekom is bringing its smart home platform to the Netherlands and UK as it looks to take a lead in the connected home space. More detail
Video: Q&A with Telekom Romania CCO Mathias Hanel at MWC15 Video: Q&A with Telekom Romania CCO Mathias Hanel at MWC15 The CCO of Deutsche Telekom's Romanian subsidiary believes delivering a good customer experience is the key challenge that must be met by telcos. More detail
Video: Q&A with TeliaSonera CCO Helene Barnekow at MWC15 Video: Q&A with TeliaSonera CCO Helene Barnekow at MWC15 TeliaSonera’s Chief Commercial Officer Helene Barnekow said people should think differently about the company as she discussed its new strategy. More detail
    

This website uses cookies to improve your experience. Using our website, you agree to our use of cookies

Learn more

I understand

About cookies

This website uses cookies. By using this website and agreeing to this policy, you consent to SJP Business Media's use of cookies in accordance with the terms of this policy.

Cookies are files sent by web servers to web browsers, and stored by the web browsers.

The information is then sent back to the server each time the browser requests a page from the server. This enables a web server to identify and track web browsers.

There are two main kinds of cookies: session cookies and persistent cookies. Session cookies are deleted from your computer when you close your browser, whereas persistent cookies remain stored on your computer until deleted, or until they reach their expiry date.

Refusing cookies

Most browsers allow you to refuse to accept cookies.

In Internet Explorer, you can refuse all cookies by clicking “Tools”, “Internet Options”, “Privacy”, and selecting “Block all cookies” using the sliding selector.

In Firefox, you can adjust your cookies settings by clicking “Tools”, “Options” and “Privacy”.

Blocking cookies will have a negative impact upon the usability of some websites.

Credit

This document was created using a Contractology template available at http://www.freenetlaw.com.

Other Categories in Features