Free and Bouygues Telecom neck and neck in number of mobile subscribers
The indicators at Iliad, Free’s parent company, are green. The group announced a turnover up 7% to 2.2 billion euros in the first half of 2015. Free Mobile garnered 820,000 new subscribers, allowing the operator to claim a 16% market share, with nearly 11 million subscribers (10.9). It follows closely behind Bouygues Telecom, slightly ahead, with 11.4 million mobile subscribers.
The group’s net income increased by 16% to nearly 163 million euros. Good results which mask a phenomenon: the price war is not free for the operator.
New contracts for fixed telephone offers exploded over the first half of the year at + 36%, or 10 points more than in 2014. But the 123,000 new subscribers (net of termination) in broadband and very high speed were recruited through very offensive promotions, to crush competing offers. Result, the ARPU (Average Revenue Per Unit), which concerns 5.9 million mobile subscribers, fell to 34.5 euros, while it was above 35 euros for the whole of 2014. Iliad manages to compensate for this loss thanks to its new recruitments and the increase in its turnover in the fixed-line business, specifies the group.
Free disappoints on the stock market
If Free is ready to cut into the fat by reducing its margins on the fixed line, it is also because it has backed its mobile offers many advantages, reserved for its Freebox customers. A strategy that can pay off if, to get ahead of its competitors, it can innovate faster on mobile and box “convergence” with new services, and on “broadband” (voice and data).
On the Paris Stock Exchange, the title lost 4.47% in the middle of the afternoon due in particular to the significant investments made by the operator for the launch of its Freebox mini 4K. These investments weigh on the group’s cash flow. They increased by 200 million euros, to nearly 613 million euros in June 2015, compared to a year earlier. The group has also announced that it will continue to invest in very high speed mobile (THD).
Read also: Free launches an entry-level box compatible with Google TV, the “Freebox mini 4K”