France Telecom has long been looked upon as immune to recession, buoyed up by a successful French video strategy, expansionism in overseas broadband markets and the Orange cellular brand, still growing strong. But its quarterly results this week punctured some of that myth, with overall revenues falling 2.7% to just under €11 billion with margins slimming slightly.
Overall the company lost 578,000 customers so is down to 183.3 million, with mobile customers staying flat at 123.7 million and home broadband customers also flat at 13.5 million. Pay TV customers (IPTV and Satellite) rose just 173,000 to 3.39 million. Customers in France were either static or grew slightly in some categories, while in other countries, notably Spain, there were falls, in particular of 400,000 mobile broadband customers. Poland, another key territory for France Telecom added 1 million mobile broadband customers, while most other categories remained flat. UK numbers were virtually flat across the board.
France Telecom was recently rebuffed by the Swiss Competition Commissioner over its plan to merge its cellular operations with the Sunrise cellular operator, owned there by Denmark’s TDC.
France Telecom said that it would finally get around to offering a full quad play consumer offering with broadband, TV, fixed-line and mobile telephony, by September this year, something it has been promising for almost a year now.
All of this comes as a vast contrast to Virgin Media, itself in all four of the same businesses as France Telecom and competing head to head with it in the UK, but coming at it from the point of view of owning cable infrastructure ‘ now one of the more advanced infrastructures in Europe.
Total revenue was up 2.9% to £963 million, with 6% growth in consumer cable revenue for the quarter. The company was in the doldrums a year ago following a fight with BSkyB over the cost of carrying Sky programming, but this quarter it came back with 41,700 net new cable TV subscribers with total gross additions up to 193,100 up 15.5%. It also drove its fixed line ARPU up 5.3% to £45.01 per home per month, and added 72,300 cable broadband subscribers.
The cellular side of Virgin, while far smaller than France Telecom was on the rise, to exceed 1 million, with 81,200 new subscribers and churn at a record low of 1.1%.