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Iliad appears unfazed by COVID-19

Iliad Group, which has mobile and broadband operations in France – and mobile services in Italy – seems to have dodged any major COVID-19 damage.

On announcing results for the quarter ended March 31, Iliad said social and financial impacts were "currently limited." The Group is sticking to its guns on financial guidance for both France and Italy.

Iliad was not entirely unscathed. Q1 included three weeks of lockdown in Italy and two weeks in France. The number of new subscribers inevitably slowed during that time, although Iliad claimed that the impact of this slowdown was offset by lower subscriber churn in France.

The pace of network rollouts was also "less robust" during Q1 2020. The processing of administrative formalities – getting hold of necessary building permits and roadworks authorization – has "slowed considerably." Bureaucratic hassle of this sort, warned Iliad, will weigh on network rollouts during Q2.

Despite all that, Iliad doesn't seem to foresee this as a major issue. In France, the target of achieving two million FTTH subscribers by the end of this year remains the same (although this is not exactly difficult since it already has 1,975,000 FTTH subs).

In Italy, the goal of having around 5,000 active basestations by year-end seems a bigger challenge. There was a shade under 3,000 active basestations in April, with 900 sites activated during the first four months of 2020.

Take me through the Q1 numbers
Group revenue was up 6.9%, year-on-year, to €1.38 billion (US$1.5 billion). The bulk of turnover is generated in France, where revenue was up 1.7%, to €1.23 billion ($1.33 billion).

Focus on service revenue, though, which doesn't get dragged down by decreases in device sales, and the picture looks a little rosier. Service revenue in France was up 4.2%, year-on-year, to €1.19 billion ($1.29 billion).

Fiber was a good Iliad performer in France with 215,000 net adds during the period. On the mobile side, the Group had 13.3 million subscribers as of March 31 (a modest 13,000 increase from three months previously).

Revenues in Italy were up 86%, year-on-year, to €150 million ($163 million). It was an impressive performance. As of March 31, the Group had over 5.8 million subscribers in Italy after acquiring more than half a million new ones during the three-month period. This means, boasted Iliad, that it has acquired a 7% market share in less than two years since it first launched its business there.

Financial guidance?
Iliad maintains its EBITDAaL margin in France of over 40% in 2020 (excluding B2B and sales of devices). EBITDAaL less capex (excluding B2B activities) remains at more than €800 million ($867 million) in 2020 and around €1 billion ($1.1 billion) in 2021.

In Italy, guidance is a little bit fuzzier. Iliad is still gunning for EBITDAaL break-even with a market share of less than 10%, and to generate €1.5 billion ($1.6 billion) in revenues "in the long term."

— Ken Wieland, contributing editor, special to Light Reading

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