Broadband services

Proximus Raises Outlook on Strong Q2

Belgium's Proximus has raised full-year guidance after beating its own expectations for sales and earnings growth in the second quarter.

The Belgian incumbent, which has changed its name from Belgacom to Proximus since this time last year, saw "underlying" revenues grow at a year-on-year rate of 1.5%, to €1.5 billion (US$1.65 billion), with EBITDA rising by 4.3%, to €450 million ($494 million).

Encouraged by the performance, CEO Dominique Leroy said Proximus would now aim to grow core underlying revenues by around 2% and underlying EBITDA by 3-5% this year, having previously guided for a "stable to slightly positive" performance.

Leroy also expects to see improvements at BICS , the international carrier business, changing guidance for underlying revenues from "stable" to "slightly positive."

Proximus's share price was trading 0.3% higher in Brussels early on Friday afternoon following the publication of results.

Although headline sales dropped by 7.4%, the figure reported last year was boosted by what Belgacom describes as "incidentals," including gains from its sale of Telindus France, an IT services subsidiary.

Incidentals provided a similar boost in the second quarter of 2014 to reported EBITDA, which consequently fell by 18.4%, while net income dropped by 42.5%, to €145 million ($159 million).

In the consumer market, Proximus gained another 111,000 broadband customers since the second quarter of 2014, giving it about 1.67 million in total, while its TV business captured another 168,000 customers over the same period to finish with 1.69 million.

The operator also increased its base of mobile customers by 33,000 over the same period and had about 4.2 million subscribers on its books in June.

Despite the effects of regulation and pricing pressure, Proximus was also able to report a slight increase in its average monthly revenue per user, which rose to €22.7 ($24.9) from €22.3 ($24.5) in the second quarter of 2014.

In a statement, the operator said improvements had been driven by "better customer tiering" and increased smartphone penetration amid growing interest in higher-speed mobile network services.

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Proximus is building a strategy around its move into offering triple- and quad-play services, whereby several communications products are sold in a single package, and revealed that 58% of the households and small offices it served in the second quarter were taking advantage of these offers -- up from 55.6% in the year-earlier quarter.

But competition may intensify in this particular market following cable operator Telenet 's €1.325 billion ($1.45 billion) takeover of BASE , Belgium's third-biggest mobile operator, which is being sold by Dutch incumbent KPN Telecom NV (NYSE: KPN). (See Telenet Buys KPN's BASE in $1.4B Deal.)

So far Telenet has been offering mobile services through an MVNO agreement with Mobistar SA , the country's second-biggest mobile operator, but it could emerge as a much stronger converged-services rival to Proximus once it has finalized the BASE acquisition.

Proximus also flagged a stable performance at its enterprise business unit, which accounted for slightly more than a fifth of revenues in the second quarter.

BICS, meanwhile, reported a 0.8% fall in revenues, to €411 million ($451 million), compared with the same period last year, but noted that sales over the first six months were 5.1% higher than in the first half of 2014, at €811 million ($890 million).

"BICS … recorded another strong quarter, driven by the continued growth in non-voice direct margin," said Leroy in the company statement.

During an interview with Light Reading in April, BICS CEO Daniel Kurgan said that MVNOs and over-the-top players were the company's fastest-growing customer segments and that soaring demand for data services was offsetting the pressure on voice revenues. (See BICS Looks to MVNOs, OTTs for Growth.)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

Mitch Wagner 7/31/2015 | 3:40:16 PM
Love it Love the name. Official broadband provider for the Transformers. 
thebulk 7/31/2015 | 1:01:49 PM
Big boost They seem to be killing it with new customers so I think the boost is warnted. but how long can they sustain that growth? 
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