Buoyant Bouygues Telecom bumps up full-year profit guidance

Operator says it's on track to dislodge SFR as France's second-largest mobile operator behind Orange (but not until 2026).

Ken Wieland, contributing editor

May 20, 2021

3 Min Read
Buoyant Bouygues Telecom bumps up full-year profit guidance

Bouygues Telecom paraded a positive set of Q1 financials and emphasized it had already reached a milestone in its recently unveiled "Ambition 2026" strategic plan through successful integration of EIT, a smaller French player. EIT now goes by the not-so-catchy name of Bouygues Telecom Business Distribution (BTBD).

The upshot is that France's fourth largest operator in the mobile space – trailing behind market leader Orange, followed by SFR and Iliad – felt confident enough to raise full-year 2021 guidance on EBITDA after leases (EBITDAal), which includes BTBD input. Year-on-year growth was previously pegged at 5% and now it's 7%.

Bouygues Telecom's Ambition 2026 plan, which covers the six-year period from end-2020, envisages the operator being France's number two mobile operator by the end of it, as well as being a "major player" in fiber.

Q1 performance, it said, showed Ambition 2026 was well on track, but the ramp-up in subscriber figures was largely down to BTBD.

Subs up

As of March 31, mobile plan customers (excluding M2M) reached 14.3 million, meaning it had already achieved 54% of its target to gain 4 million additional mobile customers by the end of 2026 compared with the end of 2020.

Sounds impressive but it does include a hefty 2.1 million mobile subscriber contribution from BTBD, although Bouygues Telecom chipped in with a healthy 141,000 "new customers" during the quarter.

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On the FTTH front, Bouygues Telecom had 1.8 million customers as of March 31, up 190,000 from three months previously. A shade over 40% of the operator's total fixed-line customers (4.3 million) have now signed up to one of its FTTH offers. It's a fair jump from the 28% penetration rate 12 months previously, and enough for Bouygues Telecom to say it was on track to achieve its target of adding 3 million FTTH customers through the six-year period covered by Ambition 2026.

The first migrations of BTBD customers to Bouygues Telecom networks started in Q1, with apparently no effect on churn rates. The first transfers of BTBD customers to Bouygues Telecom offers are due to take place before the end of this year, which, said the operator, is 12 months ahead of schedule.

Show me more money

A growing subscriber base helped turnover and profits. Q1 sales were €1.7 billion (US$2.1 billion), up 17% year-on-year (and up 9% on a like-for-like basis and at constant exchange rates).

EBITDAal was up €31 million ($38 million), to €330 million ($403 million), compared with Q1 2020 (despite negative impact of roaming estimated at around €20 million/$24.4 million).

EBITDAal margin was down 0.6 points lower, however, due to the dilutive effect of integrating BTBD and "a change in the revenue mix associated with the ramp up of FTTH, where the gross margin is lower than in the mobile business."

Operating profit in Q1 2021 was up €66 million ($81 million) year-on-year to €136 million ($166 million). This included non-current income of €60 million/$73 million (versus €2 million/$2.5 million in Q1 2020), which was mainly down to the sale of data centers.

— Ken Wieland, contributing editor, special to Light Reading

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About the Author(s)

Ken Wieland

contributing editor

Ken Wieland has been a telecoms journalist and editor for more than 15 years. That includes an eight-year stint as editor of Telecommunications magazine (international edition), three years as editor of Asian Communications, and nearly two years at Informa Telecoms & Media, specialising in mobile broadband. As a freelance telecoms writer Ken has written various industry reports for The Economist Group.

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