Iliad reported group revenues of EUR 1.34 billion for the third quarter to September, up 8.1 percent year-on-year (+8.4% in H1). In its core French market, growth in service revenues improved for the third consecutive quarter, as Free returned to positive customer growth in the fixed broadband segment. Alongside its financial results, the company unveiled plans for a EUR 1.4 billion public share buyback offer and announced the adoption of a new dividend policy of EUR 2.60 per share.
In France, Free generated third-quarter revenues of EUR 1.23 billion, up 3.3 percent year-on-year (+2.1% in Q2). Service revenues also progressed by 3.3 percent, showing evidence of what the operator described as a new growth cycle. Excluding the acquisition of Jaguar Network, service revenues increased by 2.0 percent.
The mobile business remained Free's growth driver, with revenues up 6.3 percent to EUR 524 million. Fixed service revenues rose 1.1 percent to EUR 661 million, although the underlying trend remained slightly negative (-0.6%) when excluding the EUR 11 million contribution from Jaguar Network.
Free said that competition in the French market was less aggressive than a year ago, echoing a view recently expressed by rival Orange. After six consecutive quarters of negative fixed broadband net additions, the operator returned to positive customer growth (+32,000 from -15,000 in Q2). This was partly driven by lower churn, which in turn reflected a 50 percent drop in subscribers on "ultra-discount" deals, compared with Q3 2018.
FTTH net additions improved to 210,000 (+172,000 in Q2), which Free described as the best-ever performance achieved in the French market, unequalled by any of its rivals. FTTH subscribers reached 1.52 million overall, representing 24 percent of Free's fixed broadband connections.
Total mobile subscriptions continued to decline, albeit at a slower pace (-18,000 from -75,000 in Q2), with ongoing losses of customers on "price-slashed deals". The higher-tier mobile base achieved 147,000 net additions, up strongly from 70,000 in the previous quarter. Mobile ARPU recorded a EUR 1 increase over the year to reach EUR 10.60 (EUR 10.10 in Q2), partly supported by the inclusion of a promotional e-book offer in certain plans.
Coinciding with the Q3 financial release, Iliad announced a EUR 1.4 billion share buyback offer, at a price of EUR 120 per share (38% premium on the average price over the last three months). The plan will be fully financed by a share issue representing the same amount as the offer, open to all shareholders and guaranteed in full by Iliad's founder Xavier Niel. The transaction could be completed by January 2020, if the plan is approved by shareholders at a meeting scheduled for 20 December.
