Latest quarterly figures show profits and ambitions rising
French telco Iliad has reported a rise in operating profit in its first quarter of 2022, up 5.4% from a year earlier, driven by higher revenues in both France and Italy. Earnings before interest, tax, depreciation and amortisation after leases grew to €714 million euros ($755 million) in that time, Iliad said in its quarterly financial statement, which also showed that its first-quarter sales rose by 4.8% to €1.9 billion.
Nil desperndum
Iliad’s owner Xavier Niel took the company private last year through a €3.1 billion buyout. Niel has repeatedly emphasised a mission to grow aggressively in the three countries, France, Italy and Poland, in which it operates. On entry to the Italian market in January 2022, the telco set about undercutting rivals. It adopted the same strategy for 5G as in its domestic market – undercutting competitors at launch.
Disrupteur
Iliad had launched a highly disruptive strategy in France in December 2021. In a similar vein Iliad Italia launched a 5G package on 22 December, called Flash 70, in Italy for under €10 for a limited period. In February Iliad made an €11 billion bid for Vodafone’s Italian operation, which at the time was rejected by Vodafone Group CEO as “not in the best interests of shareholders”. Since analysts at Barclays estimated Vodafone’s Italian business to have an enterprise value of €6.9 billion, there is speculation that this deal may be under consideration again.
Polish spirit
Iliad Poland is a relatively recent addition in September 2021. It was acquired from the country’s fixed internet operator UPC which was owned by US cable operator Liberty Global. In June 2021 UPC Poland’s network had passed 3.7 million homes and served 1.5 million broadband and 1.4 million video customers, and more than 600,000 telephony subscribers.
Organic growth
“Our priority remains to grow organically,” chief executive Thomas Reynaud said, adding that the group was open to acquisitions. “If a consolidation were to take place (in Italy) and if a player were to sell its Italian asset, we would look into it,” Reynaud said on a results call. In Italy Iliad is seeking to reach a deal with rival Wind Tre in Italy to share the costs of the rolling out of their mobile network. Its rival, national carrier Telecom Italia (TIM) recently clinched an infrastructure share deal with Open Fibre to give it more competitive costings.
Wind Tre
Reynaud said in March that Iliad was close to a deal with Wind Tre, owned by conglomerate Hutchinson. Iliad rents capacity from Wind Tre where it lacks coverage and formed a partnership with broadband provider FastWeb to build its 5G network. Talks are still ongoing and a transaction has not yet been finalised, a spokesperson for Iliad said. Wind Tre’s Jeffrey Hedberg moved over as CEO on April 1st 2022 but serves on the board.