Read time: 3 minutes

Europe drags down France Telecom-Orange financial results

By , ITWeb
Africa , 20 Feb 2013

Europe drags down France Telecom-Orange financial results

Poor revenue performance for France Telecom-Orange in its French and Polish markets has overshadowed its growth in Africa and the Middle East.

The telecommunications firm, which is 27% owned by France’s government, is Europe’s fourth largest operator by revenue, according to Reuters.

Almost half of France Telecom’s revenues are from France, says the Wall Street Journal. But the telco also says it has operations in almost 20 countries in Africa and the Middle East.

And according to its fourth quarter results for 2012, France Telecom says its revenue in the period fell 3.2% to 10.92 billion euros ($14.59 billion) on a comparable basis, hit by stiff competition in France and ongoing weakness at its Poland unit.

Meanwhile, restated earnings before interest, tax, depreciation and amortisation (EBITDA) fell 8.8% to 3.13 billion euros for a margin of 28.7% versus 30.4% a year ago.

France Telecom's average revenue per mobile customer further fell 10% to 336 euros last year, a sign of how much the market has changed since the arrival of Iliad's Free Mobile low-cost, no contract offers.

However, the telecommunication company’s disappointing European results have come as the firm conversely experiences growth in its Africa and Middle East markets.

According to the company, Africa and the Middle East presented the strongest subscriber growth for the operator, as it reported that it had 81.6 million mobile customers at 31 December 2012, up 9.4% year on year (7.0 million net additions).

The company added that in Africa and the Middle East, revenue growth continued to be strong at 5.3%, led by Côte d’Ivoire and Guinea.

Expanding in emerging markets is firmly in France Telecom’s sights, as the company launched Orange Horizons this year to explore opportunities of setting up the likes of Mobile Virtual Network Operators (MVNOs) in nations such as South Africa.

“The Group’s customer base surpassed 230 million globally, of which over 80 million are in Africa and the Middle East, an increase of 10% on a year earlier,” said France Telecom-Orange chairman and chief executive officer Stéphane Richard in a statement.

“However, the economic situation and the continued price war in most European countries necessitated an acceleration in the group’s transformation programme,” he added.

In concluding his statement, Richard said that in addition to France Telecom’s national roaming agreement in France, as well as MVNO and network-sharing agreements, the group plans to continue its policy of “co-operating to improve returns on investment.”

Richard added that his company plans to achieve an operational cash-flow target of over 7 billion euros for 2013.

Daily newsletter