Altice France’s (SFR) latest results, published this Wednesday, will certainly raise the mill of rivals and observers who deserve it. “Universal Customer Service Provider” for competition. Patrick Drahi’s operator reported a sharp drop in its subscriber base when it published its results for the year 2023 this Wednesday. Between the third and fourth quarters of this financial year, the group lost around 73,000 fixed internet subscribers, and no less than 231,000 mobile subscribers. . These customer leaks are getting worse compared to the group’s latest results.
This has a surprisingly direct impact on turnover. In 2023, sales of another French telecom company fell 1.3% to 11.15 billion euros. Operating profit (Ebitda) fell 4.3% to 3.92 billion euros. At the same time, investments fell by 3.1% to 2.29 billion euros. It must be said that the bulk of fiber deployment, in particular, is now a thing of the past. Knowing that over 80% of French people now have access to this technology.
This customer leak is “not sustainable”.
At the press conference, Altice’s staff substantially justified this loss of subscribers by its strategy to gradually end promotions and by the intensity of competition common to the French telecoms market. The operator does not see things improving this year and its revenue is expected to decline further in a tight economic context.
HAS GalleryOddo BHF analyst Stefan Bayazian believes that this loss of customers “not valid” In the long run. How, then, can we turn the tide? “SFR may be more aggressive again to regain better commercial momentum, in a context where Free, which has just launched a new box, is a hit, as is Boygues Telecom.The analyst continues. Clearly, SFR should review its pricing strategy, and possibly reinstate the promotion. »
In publishing its results, Altice once again insisted that its priority remained to reduce the group’s debt. The group’s net debt now stands at 24.3 billion euros. Its debt to Ebitda ratio is currently particularly high, at 6.4, and is a concern for investors. The operator wants to bring it back to a more ambitious level than before, “below 4”, he emphasized in a press conference. The aim for Altice is to manage what amounts to a “wall” of debt, with repayment deadlines of 1.3 billion euros in 2025 and 2026 and around 5.9 billion euros in 2027.
To do this, the operator intends to part with a certain asset. Last Friday, Altice indicated that it had entered into exclusive negotiations to sell its subsidiaries Altice Media (BFMTV and RMC) to billionaire Rodolphe Sade and his CMA CGM group (owner of). Gallery), for 1.55 billion euros. Last November, the operator announced that it would sell its data centers to American bank Morgan Stanley. This operation will allow it to collect around 530 million euros. But the group does not intend to stop there, and continues on “Property Review”. Among the options on the table, Patrick Drahi could decide to divest SFR, or sell his nugget XpFibre, which owns its fiber optic network.
Investigation into suspicion of corruption
Altice’s management, moreover, was silent on the initiation of an investigation into suspected corruption by the French justice system. The National Financial Prosecutor’s Office (PNF) started its investigation last September. This follows the revelations of a massive corruption scandal involving Altice’s activities in Portugal. Some of the group’s executives suspected that he had imposed a network of dubious suppliers in various subsidiaries and took unduly large sums of money. Among the managers involved is Armando Pereira, who is none other than Altice’s co-founder and former right-hand man of Patrick Drahi. At a press conference, Altis, who claims to be a victim in the case, recalled rejecting the suppliers caught in Portugal.