Growth at France Telecom, but there's that huge debt pile…
It's the deficit, stupid
France Telecom SA expects revenue this year to rise by 8% to 9% while it is looking for earnings at the EBITDA and EBIT levels to increase more than 15%. But this prediction, made as the Paris, France-based incumbent revealed third-quarter sales figures, is scarcely significant at a time when the market is waiting for details about how the company plans to reduce its 70bn euro ($68.6bn) debt.
Turnaround king Thierry Breton said he would need two months to draw up a refinancing plan when he was appointed chairman at the beginning of this month, and a lot of thought is going into how the French government, which owns 55.5% of the company, can put in cash without breaching EU rules.
In the meantime, France Telecom has recorded a 9% increase in revenue to 34.4bn euros ($33.7bn) in the nine months to September 30. Growth was driven by its Orange mobile unit, where revenue rose 13.3% to 12.2bn euros ($11.9bn) while Wanadoo SA, Europe's second largest internet service provider, hoisted revenue by 31.7% to 1.3bn euros ($1.3bn).
It fixed-line voice and data services in France saw revenue decline by 5.5% to 14bn euros ($13.7bn) and the best it can claim is that its share of the fixed-line market stabilized.
Outside France its fixed-line voice and data services recorded a 38.4% increase to 6.8bn euros ($6.7bn). This creates a misleading impression as it reflects consolidation of operations such as Equant, and a pro forma calculation that assumes they were part of its operations for the whole of the period show only a 0.6% increase.