French operator Iliad reported first-half revenues of EUR 2.02 billion, up 10.4 percent from a year earlier. Revenues from its fixed broadband business rose 3.6 percent to EUR 1.28 billion, and the mobile business expanded 24.1 percent to EUR 745.7 million in revenues.
Iliad said it added 95,000 broadband customers in the period, for a total 5.735 million at the end of June. Despite an increase in VAT on TV services and sharp discounts form some competitors, the Free brand continued to add customers in the fixed market, accounting for an estimated 24 percent of net adds on the market. ARPU was relatively stable, at EUR 35.80 per month.
In the mobile market, Free claims it took over 65 percent of net adds, growing its base by over 1 million customers to reach more than 9 million at the end of June, equal to a 13 percent market share. Iliad said its mobile phone financing offer launched last December helped sustain customer growth, even though this impacted profitability. A majority of new customers also still take the company's plan at EUR 2 a month.
The handset sales, VAT increase, end to asymmetric termination rates and higher spending on fixed network upgrades led to a drop of 1 percent point in the EBITDA margin to 30.9 percent. Total EBITDA increased 6.6 percent to EUR 624.2 million, while net profit was down 1.3 percent to EUR 139.9 million, due to higher depreciation after the launch of 4G services.
Looking ahead, Iliad said it plans to accelerate its FTTH roll-out, supported by co-financing arrangements and over EUR 700 million in free cash flow from its ADSL business this year. It will also add over 1,000 sites on the mobile network in the second half of 2014, in order to reach 75 percent 3G coverage and 50 percent 4G coverage by year-end. It also raised its mobile market share target to 25 percent in the long term, after reaching its initial target of 12 percent within two years of launch.
For the group, Iliad targets annual revenues of over EUR 4 billion next year and an EBITDA margin over 40 percent by the end of this decade.
• Achieve consolidated EBITDA margin of over 40% by the end of the decade
