SFR crying, Free laughing. The publication of the latest financial results of the two telecom operators offers a clear contrast. While SFR is recording declining results (revenue fell by 2.6% in the second quarter) and rising debt, Iliad, the parent company of Free, is showing insolent health.
Continuing the momentum of 2022, Xavier Niel’s group achieved a turnover of 4.44 billion euros in the first half of the year, a growth of 10.4%. Its sales are growing in the three countries where it is located, whether it is France (7.7%), Italy (12.2%) or Poland (17.9%).
Record recruitment of new subscribers
Even if he says to himself ” cautious due to the uncertain macroeconomic context “, Thomas Reynaud (photo), general Director of Iliad has opportunities to rejoice. In France, Free has recruited 128,000 new mobile subscribers and 205,000 on fiber.
In the current inflationary period, the operator is taking advantage of its commitment to block the price of its mobile packages at 2 and 19.99 euros until 2027 while its competitors have raised theirs from one to three euros. The new Free Flex offer which makes it possible to acquire a smartphone by spreading its price over 24 months at no cost is also a hit.
The average revenue per subscriber, the famous Arpu (Average Revenue Per User), is also increasing. The objective is to encourage the approximately 3 million subscribers at 2 euros to upgrade to the higher package. To this end, the latter has recently seen its data capacity increase from 210 GB to 250 GB per month.
Free estimates that it has the first 5G network in France with 92% of the population covered. With regard to optical fiber, Free has reached the symbolic milestone of 5 million fiber subscribers. The operator has a good conversion rate from ADSL to fiber since 70% of its fixed-line subscribers have made this choice. Its network covers more than 33.5 million connectable households and serves 23,400 municipalities.
A doubled energy bill
Free also plays on the notion of proximity with a network of 219 stores that has been growing at the rate of one opening per week since the beginning of the year and the launch of a new store concept, the Big Bang Store. The operator has also set up 109 Free Proxi centers in the regions. Either local support teams of 8 to 10 advisers who answer by phone or chat but can also travel to the subscriber’s home.
Another reason for joy: the development of the BtoB activity. In two and a half years of existence, Free Pro has convinced 40,000 companies. These are mainly SMEs but also 20% of the CAC 40 groups and local authorities such as the regional councils of PACA and Brittany. Forty hospital groups have accepted its cybersecurity offer.
The only other shadow on the board: the rise in energy prices with a bill that would have doubled in a few months. This does not prevent the group from having invested 1.04 billion euros in the first half of the year in its services, its networks or its data centers. Moreover, Iliad’s liquidity level remains particularly high, with 4.2 billion euros available at the end of June, in cash or unused credit lines.
“Free will never be for sale”
With this financial base, Iliad – which does not seem to have cooled down after the aborted attempt to buy Vodafone in Italy -, says it is looking at acquisition opportunities in the three countries where it is present or in another European country. Currently the sixth European operator, it sets itself the goal of entering the top 3. « It’s not about getting fat to get fat, ttake away Thomas Reynaud. The acquired company must be in line with the group’s DNA. »
As for the sea serpent, which would consist in reducing the number of operators from four to three on the French market, Iliad sees itself playing a consolidating role if the opportunity lends itself to adventure. « Competitors are under pressure in the inflationary context and the lack of agility of their organization”, tackles Thomas Reynaud without citing them. On the other hand, there is no question of playing the role of prey. « Free will never be for sale “, he hammered.