SFR adds customers, financials hit by VAT change, rate cut

News Wireless France 13 MAY 2011
SFR adds customers, financials hit by VAT change, rate cut

French mobile and broadband operator SFR reported EUR 3.06 billion of revenue in the first quarter, down 0.9 percent on the year-earlier period. The company absorbed a 1 January VAT increase, rather than passing it on to its mobile customers. If it were not for this decision and a regulated decrease in termination rates, SFR states that its revenue would have increased by 4.3 percent. Turnover from mobile operations was down 2.4 percent to EUR 2.13 billion, whilst from broadband internet and fixed telephony, it rose by 0.7 percent to EUR 988 million. EBITDA decreased 3.6 percent to EUR 923 million, or decreased by 1.2 percent excluding an approximately EUR 50 million impact from the VAT change. Mobile EBITDA came down 8.6 percent to EUR 762 million on the year-earlier period. Broadband and fixed EBITDA grew 6.6 percent to EUR 161 million.

 

SFR’s mobile service revenue, which excludes handset and accessory sales, decreased 3.6 percent to EUR 2 billion. Within this figure, data revenue was 25 percent higher thanks to an increase in smartphone users (31% of customers in Q1 2011 vs 18% in Q1 2010). SFR added 94,000 net postpaid subscribers in the latest quarter and had 15.92 million postpaid customers and 21.04 million overall mobile customers at the end of the period.

 

SFR states that its broadband and fixed revenue would have increased by 2.1 percent, including 5.4 growth percent in consumer broadband if not for the new VAT rules. [As previously reported, an EC ruling found that French multi-play operators were inproperly charging VAT on the TV component of customers’ service.] The operator added 65,000 net new active broadband internet residential customers in the first quarter, taking the total to 4.95 million, up 7.8 percent on March 2010. The Neufbox Evolution offer attracted over 250,000 subscribers since it was launched in the middle of November.

 

In summary, the growth in customer bases, the expansion of mobile internet and cost controls did not offset the impacts of termination rate regulation, VAT increase and competition. Parent company Vivendi adds that its agreement with the French postal service to carry new MVNO La Poste Telecom over its network will add a significant number of customers using SFR’s infrastructure.
 

Categories:

Mobile,  Internet

Companies:

SFR

Countries:

France

Tags:

Voice services, Network Access, Unified communications, Sales figures, Financial figures, xDSL, Fibre, Wireless, Internet Access

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