SFR hit by discounting as Altice sees growth in Portugal and US

Altice-owned French operator SFR saw its revenues drop by 6.1% in the first quarter to €2.57 billion, with its residential revenues hit by heavy discounting.

SFR’s EBITDA also dropped by 9% to €851 million.

SFR managed to grow its fibre base by 66,000 thanks in part to migration from legacy DSL products, but its fibre and DSL base combined dropped by 61,000 thanks to a DSL box shortage that the company said had now been resolved.

SFR’s fixed customer base droped from 6.52 million to 6.29 million year-on-year, with ARPU dropping from €34.30 to €33.90. Its fibre base increased from 1.6 million to 1.88 million. Mobile subscribers dropped from 18.14 million to 16.98 million year-on-year.

The quarter also saw SFR’s acquisition of a stake in NextRadioTV and the announcement of its plan to acquire Altice Media Group France and launch a number of new sports channels. The company described the content acquisitions as “part of a converged strategy to strengthen SFR’s product offerings, aiming to reduce churn, increase ARPU and revenue growth”.

Shares in SFR declined on the results, along with shares in parent company Altice. In Altice’s own results, operating losses in France were offset by growth in Portugal and the US. Overall, the company added 67,000 post-paid mobile customers and 105,000 fibre broadband customers in the quarter. Portugal Telecom saw the addition of 6,000 quad- and quint-play customers and 35,000 mobile post-paid subscribers, while US cable operator Suddenlink added 22,000 customers with broadband subscribers growing by 30,000.

Israeli cable unit Hot’s customer base fell by 2,000, its best performance since Altice’s IPO, with a return to growth in March, according to the company.

The strong operating result in Portugal resulted in a slowdown in Portugal Telecom’s losses to minus 3.5% versus minus 8.7% in the fourth quarter of 2015, while US revenus grew by 6.7% against 3.7% for the same period in the prior year.

Overall, Altice posted EBITDA growth of 0.9% to €1.62 billion on revenue of €1.26 billion, down 2.7%.

“We have made significant progress in executing our operational, financing and strategic agenda across the group. It has been a challenging quarter in France but we are confident that our accelerated network investment program, content-enriched service offering and operational improvements will deliver improving results throughout 2016 under the new management,” said CEO Dexter Goei.

“Portugal Telecom is well on track to become the bellwether operator in the European communications space. We are excited about Suddenlink’s performance under our first full quarter of ownership and its growth prospects. We look forward to successfully concluding the Cablevision regulatory approval process and closing the acquisition in Q2 2016.”