Orange reports sharp fall in profit on declining first-half revenue

Although average revenue per mobile subscriber fell 12 percent in Orange's home market, a price war may be drawing to a close

French telecommunications operator Orange reported a sharp fall in net profit for the first half, with as revenue declined year on year too.

The company, known until July as France Télécom, reported first-half profit of €1.21 billion (US$1.57 billion as of June 30, the last day of the period reported), down 36.7 percent from €1.91 billion a year earlier.

Revenue for the half-year totalled €20.6 billion, down 5.7 percent from €21.8 billion a year earlier. On a comparable basis, excluding acquisitions and divestments, the decline was just 4.5 percent, Orange said, while the decline would have been just 2.2 percent without the effects of price regulation.

Orange has had a challenging time in France, where it makes around half its revenue, since new network operator Free started a price war in January 2012. The attractions of Free's €20 unlimited voice and data plan are starting to fade, though, and Orange reported net mobile contract sales were at their highest since Free's launch. Orange's French mobile customer base grew 1.5 percent year on year, it said.

While the number of subscribers rose, the 12-percent year-on-year fall in average revenue per subscriber in France drove mobile revenue there down 4.5 percent, to €4.3 billion.

In Orange's next-largest national market, Spain, mobile revenue slipped 3 percent, to €1.5 billion, although fixed-line revenue grew slightly, one of the few markets in which Orange saw a gain.

Despite these declines, CEO Stéphane Richard was optimistic, highlighting the best quarterly mobile contract sales in the last two years in both France and Poland, and market share gains in Spain.

The company also hopes to boost profitability through sales of high-end services such as fiber and 4G broadband access, he said. Already, the company offers 4G service in 106 cities in France, through 886 active base stations. It expects to reach 1 million customers by the end of the year. In the U.K., through its joint venture Everything Everywhere, it offers 4G coverage to almost 60 percent of the population, and customers switching to 4G are paying 10 percent more than they did for their 3G service. The company aims to have over 1 million 4G customers in the U.K. by year-end. 4G service only began on July 8 in Spain, where Orange intends to expand coverage from an initial 6 cities to 15 by year-end, covering almost a quarter of the Spanish population. The company aims to sign up 500,000 customers for 4G services in the first year.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuestelecommunicationfinancial resultsorange

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?