Numericable-SFR loses more customers, ARPU improves

Numericable-SFR reported an improvement in its underlying sales trend in Q2, helped by its focus on quad-play offers. The year-on-year fall in revenues slowed to 2.4 percent, for a total EUR 2.781 billion, compared to a drop of 4.6 percent in the first quarter. In the consumer market, revenues fell 1.5 percent for fixed services and mobile dropped by 2.9 percent. Business revenues declined 3.9 percent. Adjusted EBITDA still improved 19 percent to EUR 1.056 billion, driven by the synergies from merging Numericable and SFR. The adjusted EBITDA margin jumped 7.2 percent points year-on-year to 38.4 percent, putting the company on track for ts medium-term goal of 45 percent. The company also grew operating cash flow 49 percent to EUR 647 million, as capital expenditure fell 10 percent to EUR 409 million. 

Despite improving results, the group continued to lose customers. In consumer mobile, SFR shed over 314,000 postpaid customers and nearly 260,000 prepaid users in the quarter, to finish June with a total 15.241 million. The company said postpaid gross adds accelerated in June after it launched new offers in May. Mobile ARPU was also up compared to Q1, to EUR 26.1 for postpaid and EUR 7.4 for prepaid.

In the fixed market the company showed a continued loss of DSL subscribers in favour of fibre, in line with its strategy to migrate customers to the fibre network. Numericable said migrations accelerated to reach 25,000 in June, five times higher than in January. The DSL customer base fell to 4.734 million at the end of June, down by almost 189,000 from March, while fibre subscribers increased over the same period by over 70,000 to 1.665 million. The switch to fibre helped increase fixed ARPU to EUR 35.3 from EUR 34.3 in Q1 and EUR 34.0 a year ago. The number of homes passed by the 'superfast' broadband services rose to 9.210 million at the end of June, from 9.119 million three months earlier.