The French telecom market might not be as difficult as the Indian mobile market, but it remains difficult.
Though Bouygues now has raised its guidance for 2015 earnings (EBITDA), compared to its May 2015 guidance, the change is driven by performance of the construction unit, not the telecom unit.
In 2014, firm earnings were €694 million. The May 3015 forecast called for full-year earnings of about that same amount. The revised forecast calls for full-year earnings of around €750 million. If Bouygues is proven correct, that would boost earnings by eight percent, year over year.
Bouygues Telecom is forecast to do better than believed when the last forecast was made in May 2015, and better than it did in 2014. But Bouygues Telecom might still lose money for the year. In the first half of 2015, the firm lost about €54 million.
The company reported a current operating loss of €54 million in the first half of 2015, €17 million better than in the first half of 2014.
Including an extraordinary (one time) item--costs related to network sharing with Numericable-SFR--the operating loss was €109 million.
Bouygues Telecom revenue remained stable in the second quarter 2015 at €1.1 billion, down one percent from the first quarter. The firm booked €2.2 billion revenue in the first half of 2015.
First-half 2015 EBITDA rose €21 million to €323 million, while EBITDA margin grew 1.5 points to 17.1 percent.
Though many are hopeful of a trend reversal in the Western Europe mobile market, with some clear signs of revenue stabilization, few would yet be prepared to predict a long-term “rising retail revenue trend.”
Mobile operators in India fear that unregulated over-the-top messaging and voice applications could destroy about 30 percent to 50 percent of total industry revenue.
The fear is rooted in trends elsewhere, including Western Europe, where voice and messaging revenue declines have not been offset by the growth of data revenues.
Between 2010 and 2020, it appears highly likely that voice and messaging revenue will have dropped by half.
Ovum forecasts that mobile revenues in Europe will decline by 1.7 percent year-on-year in 2015. In Western Europe, revenues will decline by 2.7 percent year over year compared to a rise of one percent for Eastern Europe.
The perhaps-encouraging news is that 2015 will fare better than 2013 and 2014, as the deficits are shrinking.
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