Orange revenues up, capex down

Looking after the parent

Orange today emerged from its recent harsh capital expenditure squeeze with the release of bullish third quarter financial results.

The mobile operator's base line revenues rose just over eight per cent to to €4.7bn in the three months to September 30 2003 as 1.3 million new subscriptions boosted the firm's total number of customers by 2.9 per cent to 46.9m during the quarter. Average UK revenue per user (ARPU) increased 5.9 per cent.

The upbeat results come in the wake of a recent regime of cost-cutting instigated by Thierry Breton, the chairman of Orange's parent company France Telecom. This belt tightening has seen some €451m of capital expenditure cut-backs at France Telecom - more than half of which were squeezed out of Orange.

In addition, Orange said it is further reducing its capital expenditure forecasts for FY2003 to between €2.1-2.2 billion - compared with €2.4 billion previously- due to deferred spend and further price reductions from suppliers.

During the quarter, the mobile firm reported strong growth in non-voice services across all European markets. This pushed up non-voice revenues by more than a quarter to €1.51 billion, accounting for more than 12 per cent of network revenues.

Sol Trujillo, Orange CEO, said the company was now "motoring...I am pleased that we have demonstrated over the past seven months that with careful management of costs and appropriate investment, excellent growth can be achieved throughout the Group. And this is just the beginning."

France Telecom remains on track to de-list Orange as a separate firm this year by buying out its remaining minority shareholders. ®

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