Orange SA misses expectations but gets profit boost from EE sale
Orange SA – France's largest telecoms company – has posted a sharp rise in its first-half profits due to the sale of its UK network EE to BT.
Net profit climbed to €3.17bn (£2.65bn) in the first half, pushed higher from the £12.5bn EE sale.
Revenue also climbed thanks to strong sales growth in Spain. It rose by 2.7 per cent to €20.8bn.
Orange is being forced to cut prices for mobile and broadband services around Europe due to high levels of competition for market share.
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Competition in the mobile market in the US is forcing Sprint – the fourth largest US carrier – to make similar cuts in a bid to attract customers.
Orange said adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 2.3 per cent to €3.34bn on revenue of €10.07bn ror the three months to 30 June.
Analysts polled by FactSet had forecast adjusted Ebitda of €3.34bn on sales of €10.12bn for the period.
The sale of Orange's 50 per cent stake in EE to BT in late January involved a £3.44bn cash offering and a four per cent stake in BT.
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BT's interest in EE was driven by a desire to be able to offer so-called quadplay to consumers – where a customer is sold fixed-line phone, mobile, internet and TV services as one package.
Virgin Media and TalkTalk are already making a success of the strategy while Vodafone and Sky are gearing up to do the same.