France Télécom reports falling revenue and earnings in Q4

The company blamed unspecified regulatory measures for much of the decline

France Télécom reported a 4.5 percent drop in revenue in the fourth quarter, blaming much of the decline on regulatory measures.

The company reported revenue of ¬10.9 billion (US$14.4 billion as of Dec. 31, the last day of the period reported), down from ¬11.4 billion a year earlier.

Full-year revenue fell 3.9 percent to ¬43.5 billion, down from ¬45.3 billion a year earlier, while full-year net income fell 79 percent to ¬820 million, down from ¬3.9 billion a year earlier. The company did not publish its fourth quarter net income.

The company blamed much of the decline in revenue on unspecified regulatory measures, which it said had cost it ¬916 million over the year.

France Télécom reported 230.7 million customers at year end, up 3 percent over the year. In France, the number of mobile customers grew 0.4 percent, the same as in the rest of Europe, despite the arrival in the French market of a new competitor, Free, which significantly undercut its rivals and provoked a price war. Africa and the Middle East now account for over one-third of the company's customers: the total there rose 9.4 percent to 81.6 million.

Over the last year, the company has sold off subsidiaries in some countries, but signaled that over the next two years it will consider acquisitions to increase its market share in markets where it already operates. The company is also aiming to increase cloud computing revenue by 30 percent, and sell 12 million data-capable phones in Africa and the Middle East, boosting the number of customers able to access data services there by 70 percent.

In France, the company aims to maintain its share of the mobile market at over 35 percent. It had slipped to 37.3 percent at the end of last year as a result of the price war with Free, although France Télécom has since retaliated with new low-cost online-only tariffs while maintaining higher-priced offers for its existing customers.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

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Peter Sayer

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