[07-27-12] France Telecom<\/b> reported a decline in both its 2012 first-half revenues and sales due to price cuts to prevent customer defections to rival discounters in the sector, as well as market-share gains in Spain from Telefonica<\/b>, according to France Telecom\u2019s latest results issued July 26.<\/p>\n
Iliad<\/strong>, a French discount service and competitor of France Telecom, began selling mobile-phone subscriptions under the Free brand in January. The service picked up 4 percent of the market in the first 80 days following the launch by distributing solely over the Internet and offering phone plans without contracts. \u201cClearly, France Telecom has managed its business in Spain better than others,\u201d said Obiodu. \u201cWith revenues falling, the emphasis is likely to shift to cuts to help stabilize margins. Unsurprisingly, Telefonica obliged by slashing dividend payments. As telecoms performance lags economic performance, Europe\u2019s continued economic woes means the telcos are not out of the woods yet. As such, the challenge for telcos is to extract additional value from their businesses despite the difficult circumstance. This is not going to be easy. There is still growth in broadband. But while new wave revenues from M2M, health services and other applications are promising; they will not provide imminent relief. Tariff innovation may provide much more value in the immediate term.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" [07-27-12] France Telecom reported a decline in both its 2012 first-half revenues and sales due to price cuts to prevent customer defections to rival discounters in the sector, as well as market-share gains in Spain from Telefonica, according to France Telecom\u2019s latest results issued July 26. Iliad, a French discount service and competitor of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-82729","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/82729"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=82729"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/82729\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=82729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=82729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=82729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n France Telecom sales fell 3.2 percent year-over-year to 21.8 billion euros ($26.5 billion), but beat the 21.7 billion euro ($26.6 billion) consensus of industry analysts. Despite Telefonica\u2019s increased market strength, France Telecom boosted its revenue by 2.3 percent in the Spanish market during the first half of the year. The company\u2019s overall wireless market share did not change from the 38 percent it reported during the previous quarter.
\n \u201cWe\u2019ve been progressively winning market share in Spain for a few quarters with prices about 15 percent lower than our rivals and a sophisticated marketing strategy,\u201d France CTO Gervais Pellissier said in a statement.
\n Ovum<\/b> Principal Telco Analyst Emeka Obiodu said that both France Telecom and Telefonica\u2019s latest results highlighted the challenge facing Europe-dominated telecoms operators.
\n \u201cIn both cases, continued economic challenges in their main markets, plus the heightened competition from the entry of Free Mobile in France, have been largely to blame,\u201d Obiodu wrote in a July 26 research report. \u201cThis is not surprising. An underlying weakness in the European market had encouraged telcos to see opportunities in emerging markets. But as was evident with Vodafone\u2019s results and now, emerging markets are no longer sufficiently covering poor performance in Europe. And that is why these telcos are all reporting poor performance at the group level.\u201d
\n Obiodu added that the market situation in Europe is not just about economics, as France Telecom grew its revenue in the market that Telefonica operates in, while Telefonica\u2019s market revenues fell 12.7 percent.<\/p>\n