Eir owner Niel's Iliad suffers shares slump
Shares in Eir owner Xavier Niel's main French telecoms business Iliad suffered their worst drop in almost 12 years yesterday after the company announced that it lost broadband customers in the first quarter for the first time ever.
The numbers may help explain why Mr Niel, who became a billionaire shaking up the French telecoms market, has looked to Ireland and now to Italy as engines of future growth.
In France, Iliad and rival Altice's SFR unit are losing market share to Orange and Bouygues's telecom unit, said Stephane Beyazian, an analyst at Raymond James Investment Services. Iliad is eager to kick off operations in Italy this quarter, where it aims to replicate the success it had at home with fixed-line and mobile-phone services. Iliad also plans to overhaul its sales and marketing in France to reignite growth, said Thomas Reynaud, the deputy chief executive officer who was named late on Monday as the successor to Maxime Lombardini as CEO.
"A market (in Italy) worth €16bn will open to us," Mr Reynaud said on a call with analysts, calling Italy "an incredible source of future growth" for the group. At home, customers for its broadband services declined by 19,000 in the quarter amid "fierce market competition," Iliad said. The stock slumped 17pc to €136.70 a share after the news.
Carriers in Italy have been bracing for the entry of Iliad. In France, Iliad plans to move away from aggressive flash sales to a broader approach of tiering tariffs, Mr Reynaud said. "In a market that's more and more competitive and mature, we were probably not quick enough to adapt our commercial strategy and that's what we're trying to change," he added. (Additional reporting Bloomberg)