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Author: Vincent Poulbere
This morning, the Bouygues conglomerate released its full-year 2005 results. Its mobile telephony division, Bouygues Telecom, posted revenues up by 3% to €4.5bn on a comparable basis, EBITDA up by 15% to €1.3bn and operating profits up by 10% to €656m.
Bouygues Telecom expects revenue growth of 1% in 2006.
Comment: The 2005 results confirm that revenue growth will be a key challenge for the third French mobile operator in 2006, but we expect it will be even tougher in 2007, when MVNOs will really start gaining significant market share from network operators in France. It is worth mentioning that Bouygues is usually cautious in its growth forecasts, but that does not impact much on the 'bigger picture'.
On the other hand, the operator is in a healthy financial situation, with an EBITDA margin increase of around 3 percentage points to 29.8%, on a comparable basis (including mobile-to-mobile billing). However, its profits for 2005 have been affected by the €58m fine from the French Competition Authority due to market collusion with other French mobile operators.
So questions remain about the future of Bouygues Telecom. In addition, 2006 is supposed to be the year of the implementation of a new HSDPA network for the launch of services in early 2007. This is an important step for the group to take as part of the mobile broadband race, but there are big challenges here. It is building a network from scratch - Bouygues has not built a UMTS network so far - and there will probably still be a lack of consumer HSDPA phones by early 2007.
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