Orange lowers its income in Spain by another 4.6% due to the commercial battle

Orange continues to suffer from the price war in Spain. The French telecommunications operator has closed the first quarter of this year with a fall of 4.6% in its total income, which means slightly worsening what was achieved in the last period of the year 2021. It lowers the drop in sales for the ‘traditional’ connectivity business, but it suffers in the wholesale, given the drop in international data traffic. It sets the objective of returning to growth in operating cash flow at the end of the year. These are the first data presented by the company after the start of exclusive negotiations with Másmóvil to close the merger of both with a ‘joint venture’.

In total, according to data made public by the parent company in Paris (France), the Spanish subsidiary closed the first quarter with 1,132 million euros. Los service revenues fell 4% (in the fourth quarter of last year they fell by 5.4% and in the third, almost 8%), while the wholesale business suffered more than 8%. The sale of mobile phones and electronic devices -with less profit margin- fell by 3%.

Orange headquarters, in the La Finca Business Park, on May 14, 2021, in Pozuelo de Alarcón, Madrid (Spain).  Orange Spain has announced the beginning of the negotiation with the legal representation of the workers of an Employment Regulation File (ERE) that will affect up to 485 company employees. a meeting with the workers to start a negotiation process that they hope will take place during the months of May and June.  MAY 14, 2021;MADRID;POZUELO DE ALARCÓN;ERE;ECONOMY;WORKERS;ORANGE Ricardo Rubio / Europa Press (FILE PHOTO) 5/14/2021

“Spain remains our most difficult market and we are pushing our strategy to restore growth”assures the new CEO, Christel Heydemann, who reiterates the bet on the merger with Másmóvil as a transaction that would create a “sustainable competitor with investment capacity, infrastructure necessary for future development and that will benefit both companies and consumers in the country”.

The operator admits that the Spanish market remains “very competitive”, especially in the low cost segment. In this context, according to its own numbers, the average income per converging client continued to improve, although it remained in the red: it fell 0.3% compared to 1.8% in the fourth quarter. The churn rate (known in jargon as churn) dropped four points in the last year.

The global CEO defends the merger with Másmóvil to create a “sustainable competitor with investment capacity and infrastructure”

In the commercial field, this pressure has been perceived in portability, as has happened to other of its rivals. During this first quarter of the year they lost 10,000 net clients in convergence (fiber and mobile or packages with TV) and 56,000 in mobile. On the positive side, the fiber to the home (FTTH) customer base was closed, which added 21,000 net additions.

Looking ahead, the company has set a new financial goal. At the time, the company assured that it would not grow again in gross operating profit (Ebitda) until the beginning of 2023. Now, the approach is different. They assure that they feel confident in returning to growth in organic cash flow at the end of this year 2022.


Source: LA INFORMACIÓN – Lo último by www.lainformacion.com.

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