November 16, 2017 / 6:57 AM / a year ago

Iliad posts higher quarterly sales as it prepares Italian launch

BARCELONA (Reuters) - Iliad (ILD.PA), whose market launch in 2012 shook up the French telecoms industry, won over more customers in both its fixed and mobile businesses in the third-quarter and said it was on its way to finalizing a team to launch its business in Italy.

Iliad’s launch in Italy, due later this year or early 2018, is its first international foray besides a failed $15 billion bid for T-Mobile US, and will be a major test for the French company’s billionaire founder and majority owner Xavier Niel.

“More than 70 people have already been recruited, essentially in Milan but also in Rome,” Chief Financial Officer Thomas Reynaud said in an interview on the sidelines of a Morgan Stanley telecoms conference in Barcelona.

“The staff will continue to grow and we’ll be present in several cities, notably to deploy our network,” he added, declining to give the names of the local executives.

Iliad is aiming to grab a quarter of the Italian mobile market using the same cut-throat prices and straightforward contracts that conquered France, two sources familiar with its plan told Reuters in April.

Iliad will compete against former monopoly Telecom Italia (TLIT.MI), Vodafone (VOD.L) and low-cost operator Wind-Tre.

Vodafone plans to use its customer data expertise to fend off competition in Italy from Iliad and avoid an India-style price war, its chief executive said on Wednesday.


Iliad is used to fierce competition in France, where repeated attempts to cut the number of operators from four to three have all failed, prolonging a climate of heavy promotions.

On Thursday, rival Bouygues Telecom (BOUY.PA) increased its margin forecasts, sending Bouygues shares higher.

Iliad, which runs the “Free” Internet and mobile brand in France, said third quarter sales had risen by 5.3 percent from a year ago to 1.246 billion euros ($1.5 billion).

It won 250,000 new mobile subscribers during the quarter, bringing its market share to 18.7 percent.

It also had 27,000 new broadband customers over the period, although this marked a slower growth pace on this part of its business as clients await the launch of its new set-top box.

The company pioneered bundles of TV, internet access and fixed-line telephony under its Free brand in France.

Iliad’s 2012 market launch sparked a price war in the French telecoms and mobile market, with Iliad looking to win business away from rivals such as Orange (ORAN.PA), Bouygues Telecom and Altice’s (ATCA.AS) SFR unit.

Iliad shares dipped 1.4 percent in early session trading, although the stock remains up by around 14 percent in 2017.

Reporting Mathieu Rosemain in Barcelona; Editing by Michel Rose/Sudip Kar-Gupta

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