March 17, 2020 / 8:41 AM / 20 days ago

UPDATE 1-Iliad says no telco network congestion from French, Italian lockdowns

* Commercial review, investments bear fruit - CEO

* No network congestion in France, Italy due to lockdown

* Founder Niel named chairman (Recasts, adds CEO quote, details)

By Mathieu Rosemain

PARIS, March 17 (Reuters) - French telecoms group Iliad said on Tuesday it had seen no network congestion so far as a result of lockdown measures in France and Italy in response to the coronavirus outbreak.

Iliad Chief Executive Thomas Reynaud made the observation in a call with news reporters after the Paris-based company reported 3% sales growth in its home country in 2019.

“Our networks are very busy, of course,” Reynaud said.

“We’re in a new situation, there’s no taboo,” he added when asked about the possibility of lowering bandwith allocation for video-streaming platforms such as Netflix.

Sales reached 4.9 billion euros ($5.45 billion) last year, fulfilling a pledge Iliad made during a challenging year.

“This is above all due to the review of our commercial structure and our fixed and mobile investments,” Reynaud said.

Iliad’s shares were outperforming the market, jumping by about 15% at 0830 GMT.

Iliad, whose low-cost phone deals shook up France’s mobile market, was hit by a price war which dented its market share and undermined profitability, raising doubts among investors over whether its founder, Xavier Niel, could salvage the company.

Iliad said in a separate statement on Monday that Niel, who now owns 71% of Iliad’s shares, was named chairman, replacing Maxime Lombardini, who will become vice-chairman.

Niel underwrote 1.3 billion euros out of a 1.4 billion euro capital increase last year to finance a sizable share buyback, a move partly meant to dispel criticism that he was not hands-on.

Iliad said its consolidated revenue for 2019 was up 9% to 5.33 billion euros, while core operating profit fell by 5.8% to 1.65 billion, as the group continued to develop its network in Italy, its first venture out of France.

“2019 was a very strong year in terms of investment in our networks,” Reynaud said. ($1 = 0.8986 euros) (Reporting by Mathieu Rosemain; Editing by Amy Caren Daniel and Alexander Smith)

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