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TMCNet:  Ovum comments: France Telecom results continue the dismal performance of Europe-dominated telcos

[February 20, 2013]

Ovum comments: France Telecom results continue the dismal performance of Europe-dominated telcos

Feb 20, 2013 (M2 PRESSWIRE via COMTEX) -- France Telecom results announced today continue the dismal performance of Europe-dominated telcos. Emeka Obiodu, principal analyst at Ovum comments: "Yet again, the results of another Europe-dominated telco reinforces the sense of gloom across the industry. We are not surprised by this. In France where the entry of Iliad's Free Mobile has triggered intense price competition, revenues have fallen by 5% on a comparable basis. This matters a lot as France Telecom makes about half of its revenues from its home market. Sadly, better performance in smaller overseas markets is not going to be enough to offset such a big challenge at home. An impairment charge in Poland compounded the gloom and the performance of Everything Everywhere in the UK does not leave much to be desired.

"But Spain offers some hope to the group. There, France Telecom grew its revenues at a time when its peers in the market are struggling. It attributes this to increases in mobile internet usage and take up of triple play bundles. Can France Telecom recreate its Spanish success in France Unfortunately, it is unlikely. And this is the crux of the matter. For all the talk about a single EU market, each country's telecoms market remains intrinsically individual, independent and unique. The group is the dominant player in France, but has had to pursue a challenger strategy in Spain. As such, the group is akin to the hippy teenager in Spain, but a full member of the establishment in France.

"Today's results will rekindle calls for new acquisitions or asset disposals. But any target that can sufficiently reduce the group's reliance on France will not come cheap. On the disposal front, the stake in Portugal's Sonaecom looks set to go, and the IPO of EE becomes more likely. Ultimately, the most immediate challenge is to stabilize the situation in France and then seek minor additions and gains from elsewhere." To speak to Ovum about this please contact the ovum press office on +44 (0) 20 7551 9153 , or email ABOUT OVUM Jointly awarded IIAR Global Analyst of the Year 2012, Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Its research draws upon over 400,000 interviews each year with business and technology, telecoms and sourcing decision-makers, giving Ovum and its clients unparalleled insight, not only into business requirements but also the technology that organizations must support. Ovum is an Informa business.

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