FT Boasts iPhone Sales, Higher Dividends
Under French law the carrier, Apple's chosen iPhone partner in France, cannot tie mobile subscriptions to the iPhone -- the buyer gets to choose whether to get mobile connectivity and services from Orange or its rivals, Bouygues Telecom and SFR . (See France Unlocks the iPhone.)
France Telecom is happy, though, that 48 percent of those initial 30,000 iPhone sales have resulted in new accounts. "This confirms that the iPhone will make an active contribution to the acquisition of new customers," stated France Telecom executive director Louis-Pierre Wenes in the company's news release.
But while FT describes the sales numbers as "a very good score," an average of 6,000 per day is a lower hit rate than in the iPhone's other European territories. Britain's Telefónica UK Ltd. claimed to have sold tens of thousands of iPhones, all with O2 subscriptions, in the first few days after launch, while Germany's T-Mobile International AG pushed out 15,000 devices on its first day of iPhone sales. (See iPhone's Damp Squib.)
The iPhone update came as the French incumbent outlined its 2008 financial targets to investors, and predicted better dividends next year. (See France Telecom Looks Ahead.)
The carrier said between 40 percent and 45 percent of its expected €7.5 billion ($11 billion) 2008 cash flow is set to be returned to investors as a dividend, putting the 2008 payout range at €1.20 to €1.30 ($1.77 to $1.91) per share.
The analyst team at Dresdner Kleinwort believes some investors may have been expecting higher returns following FT's better-than-expected third quarter results and resulting 2007 cash flow guidance upgrade. (See France Telecom Boasts Q3 Growth.)
"We had been looking for a more aggressive pay-out and would expect investors to be somewhat disappointed," noted Dresdner in its research email sent out this morning.
It appears investors were expecting something better, as France Telecom's share price dipped by €0.70, nearly 2.7 percent, to €25.40 on the Paris exchange today.
The carrier also reaffirmed its "cautious and selective acquisition and disposal policy, focused primarily on targets in markets with strong potential." France Telecom, along with a number of international operators that specialize in emerging market investments, currently sees plenty of potential in Africa, where it has recently acquired a license in Niger and a controlling stake in Kenya's incumbent carrier. (See FT Adds to African Assets, FT Buys Again in Africa, and Top Ten: Emerging Markets Carriers.)
— Ray Le Maistre, International News Editor, Light Reading