Orange Q2 sales stutter
July 26, 2016
Orange’s sales recovery stuttered in Q2 as competition in the French mobile-phone market weighed on wireless revenue, offsetting increasing demand for broadband services.
Sales were little changed at just over €10 billion. Adjusted earnings before interest, taxes, depreciation and amortisation rose 0.1 per cent on a comparable basis to €3.34 billion.
Sales are stuttering after starting to recover in recent quarters, with Chief Executive Officer Stephane Richard seeking to compete on service, network quality and innovation, rather than major discounts.
While price pressure increased in the French mobile market, Orange added 93,000 domestic fixed broadband customers in the quarter in its domestic market. The carrier decided not to participate in the price war in the French mobile market to preserve the quality of its network, Chief Financial Officer Ramon Fernandez said during a conference call with journalists. “We will keep our efforts to continue to invest and to improve the quality of our networks,” he said. “We will keep a selective acquisition policy privileging our current geographical areas and value creation.”
Fernandez added the UK’s decision to leave the European Union will have no impact on Orange.
Commenting on the first-half 2016 results, Orange Group Chairman and CEO Stéphane Richard said: “The first-half results again confirm the Group’s positive momentum, enabling us to reaffirm our objective of growth in restated EBITDA for the year 2016. The revenue growth seen in the first half illustrates the quality of our commercial performance across all our areas of operation, and was achieved in markets that remain highly competitive, particularly France which experienced aggressive promotional activity during the first half. In Europe, business was driven by the very high-speed fixed and mobile activities. In one year we have doubled both our fiber customer base to 2.5 million customers as well as our 4G customer base, with nearly 23 million customers. This good performance underscores the success of our Essentials2020 strategy of investment in fiber and 4G networks, with strong growth over the period, and in the quality of the customer experience, with in particular the opening of new Smart Store outlets and the launch of the new Livebox in France. The Africa and Middle East region remains a growth area. We have continued our development with several acquisitions, effective in the first half, representing 12 million customers and enabling us to enter Liberia, Burkina Faso, and Sierra Leone, and to consolidate our business in the Democratic Republic of Congo.”