Free recruiting 20% of new subscribers in H1

Iliad publishes first-half performance in line with those of the first quarter, with Free recruited about 20% of new subscribers of the fixed market (ADSL) and Alice showing a further erosion of its subscriber base.

The group achieved a turnover up 4.6% in the first half to 1.015 billion euros, up by 11.1% for brand-free and a fall of 21.4% for Alice.

The group totaled 4.514 million ADSL subscribers at 30 June against 4.456 million in December 31.

Iliad has continued to increase in the first half of its rate unbundling is crucial for improving its margins, on the end of June to 87.5% against 85.4% in late December 2009.

Under its brand Free, the internet service provider has recruited 125.000 new net subscribers in the first half of termination, and claiming a market share of 20% of conquests, compared to 23.3% in the first quarter alone.

The Free brand now totals 3.9 million subscribers, for a turnover of 869 million euros Iliad said in a statement.

Alice, being restructured, lost 67,000 subscribers during the period, saw its subscriber base to deteriorate again and reduce its sales to 135 million euros.

The erosion of the subscriber base has nevertheless slowed over the second half of 2009, and Iliad reported a primer for improving the rate of termination for Alice.

The group also said that the ARPU, measuring the average revenue per subscriber rose to 36.3 euros in the first half, close to its historic high of 36.5 euros reached in the fourth quarter of 2009.

Around 10:30, the Iliad share fell by 1.18%, to 68.06 euros, compared with a decline of 0.5% of the telecom sector index.

"Profitability should logically be at the rendezvous in the first half especially in view of finalizing the deployment of synergies at Alice and the sharp increase in the rate of unbundling at group level," said an analyst in a note of CM-CIC in a note.

OBJECTIVES CONFIRMED

Iliad is facing strong competition from SFR (Vivendi), which claimed second place in the French ADSL market at the end of first quarter.Vivendi will publish its interim results on September 1.

France Telecom, the market leader, is aiming for him to recover his share of conquests in ADSL, thanks to the launch of a quadruple play – mobile, fixed, Internet and television – after starting the year particularly low.In the second quarter, the share of conquests of France Telecom was 15.5%.

The group confirmed its financial and operational targets for short and medium term, which include free cash flow ADSL accumulated over 1.1 billion euros between 2010 and 2012, incorporating Alice.

Iliad also banking on a growing "double digit" of the EBITDA in 2010 and "a very strong increase in net income" over the same period, and aims to generate an EBITDA of 90 million euros a year earlier, in the second half of 2010 on Alice.

The project Free Mobile will have its first commercial offerings in the mobile appear in 2012.

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