The share price of French telecoms wild-child Iliad has continued to tumble as lukewarm results fail to impress investors looking for a spark in the broadband business.

Since the turn of the year, the erosion of share price has been quite noticeable. Some companies might be able to accept a small blip in performance, but a 45% decline over the last ninth months will certainly have the executive team shifting uncomfortably. Revenues remained relatively stable, however losing 70,000 subscribers in mobile and 47,000 in broadband over the first half of the year is a worrying trend.

Looking specifically at the financial side of the results, total revenues stood at €2.4 billion, a minor decrease on the same six month period of 2017, with mobile rising 2.4% to just over €1 billion and broadband dropping 2.2% to $1.3 billion. Italy brought in €9 million, though the team has been boasting of reaching 1.5 million subscriptions in early August. This seems to be one of the few bright spots in the six months.

Having kicked off the race to the bottom, causing chaos for the incumbent mobile providers during 2012, Iliad seems to be getting a taste of its own medicine with a competitive market being blamed for the tepid performance. Unfortunately for the telco, the misery is not being equally shared as rivals Orange , SFR and Bouygues Telecom all gained subscribers over the same period. Stability in the revenue column might be an uptick, but investors should be concerned about the first drop in mobile subscriptions since the 2012 launch, and a cash-intensive fibre business which is not hitting the marks.

That said, Iliad caused chaos once and has the potential to do it again.

The management team has excepted this performance is not good enough, though various new initiatives will look to return the business to a new growth cycle. On the mobile side of things, new tariffs have been introduced to diversify the subscriber mix, while incentives have been put in place to upgrade users to the more lucrative 4G contracts. 4G subscriptions did increase by 200,000 over the period, and the team are targeting a 25% market share, though have declined to put any deadlines on the objective. Perhaps this is one of the reasons for a lack of confidence in the business, no commitment to top-line objectives.

In the broadband business, a new promotional campaign with competitive prices has been introduced, as well as a play to catch attention through TV services. The content side is yet to be launched, and it will be interesting to see whether Iliad takes the value add or revenue generation approach to content. We suspect with subscribers numbers going south, a value add proposition would be a much more sensible approach to stemming the consistent flow of customers heading towards the exit.