France Telecom remains resilient

European telecoms giant France Telecom this week reported that first quarter revenues were almost flat year on year at €12.7bn while EBITDA (earnings before interest, tax, depreciation and amortisation) fell 4.4 per cent year on year to €4.3bn.

The group’s total subscriber base hit 183.5 million at the end of March, up 6.3 per cent year on year, including 122.9 million Orange mobile customers, following mobile net adds of 10.6 million.

The number of 3G mobile broadband customers increased to 20.6 million at the end of the first quarter, compared with 11.5 million at the end of March 2008.

On the fixed line side, ADSL broadband services were up to 13.2 million customers, following an 8.7 per cent increase year on year. VoIP subscribers topped 6.9 million, up 28 per cent year on year, while the total number of Livebox customers rose to 8.2 million at the end of March 2009, for 20 per cent growth.

Commenting on the results, Michael Kovacocy, European telecoms analyst and sector strategist at Daiwa Securities, noted that weakness was evident in geographies outside France, especially Spanish and Polish revenues, which were both down, while the domestic market of France is proving to be a “fortress”.

“We believe that weakness outside of France is already well baked into France Telecom’s shares. The ability of French operations (46.6% of group revenue) to deliver resilient results at what may be the bottom of the economic cycle coupled with FCF visibility should improve sentiment,” Kovacocy said.