France Telecom has reported 36.5% revenue growth for Q1.
France Telecom today reported its Q1 results, which showed overall revenue growth of 36.5% on Q1 last year to E10.04 billion. However, FT’s organic growth before acquisitions are taken into account was just 7.5%, compared with 8.1% for 2000.
Mobile subsidiary Orange, formed last year by merging the UK operator with FT’s other mobile interests, saw its sales grow 33% to E3.4 billion. Orange UK showed a 42% rise in turnover, with sales of E1.25 billion. Even better, excluding handset sales the growth was 50% – positive news in a saturated market. A disproportionate growth in revenue from calls and text messages should allow the operation to keep growing even as handset sales slow.
However, Orange’s French business, Itineris, grew by just 19% to E1.5 billion, even though the French mobile market is less saturated than the UK’s. While non-handset revenues grew faster at 28%, there’s a danger that Itineris’ 48% share of the market will restrict future growth possibilities.
Unsurprisingly, the core French fixed-line business did less well: revenues fell by 1.8% on a pro forma basis. This is no surprise – competition throughout Europe is hitting incumbents; the business will continue to decline. The question is whether Orange and Internet subsidiary Wanadoo will make up the difference.
For Orange, the challenge is to transfer its undeniably strong marketing strategy from the UK to other markets – especially outside France. The group currently has 7.1 million customers in the rest of the world, many in emerging markets. There’s a good chance that it will be able to grow this number substantially in 2001.
The prospects for Wanadoo look less certain. The operator is way behind Europe’s largest ISPs, Tiscali and T-Online. However, it does have the advantage of France Telecom’s network infrastructure and financing – and unlike Tiscali, it is the number one operator in its two largest markets of France and the UK. Whether it will increase its revenues substantially on this quarter’s E290 million, however, is still open to question.
