Iliad's odyssey continues as it moves into Europe's top five

"Our H1 results are showing some Olympic momentum," quipped Iliad CEO Thomas Reynaud, clearly unable to resist some reference to France's recent successful delivery of the Olympic Games in Paris and elsewhere.

Reynaud was referring to the fact that the group has now achieved its long-held goal to join the European top five telco club before the end of 2024.

"Iliad managed to break into the top five European operators. We now have 50 million subs across France, Poland and Italy, and with our investment in the Swedish operator, Tele2, that number goes up to 60 million subs," he said.

Speaking during Thursday's earnings call, Reynaud said he is confident that the group will also reach the "symbolic target of €10 billion in revenue in 2024" from its three key markets.

"Clearly, the 2024 Odyssey plan has truly paid off. It was perfectly executed. And now we need to keep on being proactive, and this is exactly what we did during the first six months of 2024 in terms of innovation," he added.

In the first six months of 2024, Iliad reported a 10.3% rise in consolidated revenues to €4.9 billion (US$5.4 billion). EBITDAaL rose 13.2% to €1.86 billion ($2.1 billion) and the profit for the period was 8.6% higher at €251 million. Total capex was 14.6% lower at €888 million ($983 million), while net debt was broadly unchanged at €10.25 billion.

Iliad's primary operations are in France, Italy and Poland, while it also owns former Irish incumbent eir along with NJJ Holding, Iliad founder Xavier Niel's private investment vehicle. Via its investment in Tele2, it has access to Sweden, Lithuania, Latvia and Estonia.

In terms of further expansion opportunities, Iliad has been thwarted in its efforts to buy Vodafone Italy, which is now in the process of being acquired by Swisscom. Reynaud observed that Iliad Italia will now pursue a standalone strategy with the aim of boosting broadband and mobile market share through organic growth.

Meanwhile, Niel's NJJ venture also has a 2.5% stake in Vodafone Group and has recently signalled interest in entering Ukraine as well as buying more shares in Millicom, which provides telecom services in Latin America through its Tigo brand. Niel's Atlas Luxco investment vehicle recently announced it now has a 40.42% stake in Millicom following a public offer. In addition, NJJ has invested in telecoms operators in Cyprus, Liechtenstein, Malta, Monaco and Switzerland.

Adventures in AI

Reynaud was particularly keen to talk about Iliad's AI initiatives as the operator has previously outlined plans to become an AI champion and build up an AI ecosystem in France. Late last year, for example, it opened Kyutai, its AI research lab in Paris. In July, Kyutai unveiled Moshi Chat, a native speech AI model.

Meanwhile, Scaleway is Iliad's cloud services subsidiary, and more than 20% of its revenue is said to come from the AI business. In addition, its OpCore data center unit now has 15 data centers and "our aim is to keep on growing," Reynaud said.

"There is a huge demand for new data centers. We already have more than 150 different customers, some hyperscalers, some startups, some large corporations. The name of the game for us is to invest €2.5 billion in our data center business over the next ten years," he said.

He added: "Clearly, as you can tell by the amazing results of Nvidia this morning, there is a huge demand also in Europe regarding AI, and I think it will have a very positive impact on our business, on OpCore … and on Scaleway."