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Iliad (Free) at the lowest on the stock market since the end of 2011

Bad trading day on Thursday for Iliad, the parent company of Free. Xavier Niel's group lost nearly 6% in the Paris square. Its capitalization is maintained at just under 5 billion euros. Since May 2017, it has declined by almost 60%.

Iliad is currently bottoming out since the end of 2011, just before the launch of its mobile offers. In September, the group had already reached its historic low on more than six and a half years.

The course then recovered with the rumors and the official launch of its last box, including a high-end model. But it resumed its downward trend at the end of 2018. Since early September, the price has fallen by nearly 20%.

Growth continues for Orange and Bouygues Telecom

Why such a fall during the trading session on Thursday? Its two direct competitors Bouygues Telecom and Orange have published their annual results today and the performances are at the rendezvous, both on the mobile and in the fixed. Including during the last three months of the year, during which Iliad marketed its new box.

The market is therefore wondering about the success of this launch … Especially as on the sidelines of the results of Orange on Thursday, the boss of the incumbent operator, Stéphane Richard, said " not having recorded significant customer movements or brakes on recruitments since the launch of the Delta Box. For his part, Martin Bouygues joked: " We only found one impact, ie no impact. "

Mid-December, Iliad unveiled a lighter version of its last box, devoid of the many services of the Delta, its high-end model that had been criticized for its price (offered from 59.99 euros per month the first four years ).

(c) Bloomberg screenshot
(c) Bloomberg screenshot

Drop in subscribers on landline and mobile

Iliad's decline in the stock market on Thursday is also attributable to the Italian mobile market where the group launched in mid-last year and where its start was promising. The Italian business daily Il Sole 24 Ore reports a slowdown in the market on the other side of the Alps.

Another bad news for the operator while in France, the context is complicated. Free Mobile saw its subscriber base decrease between April and September. 290,000 customers switched to competition over the period.

On the fixed, hemorrhage is less serious for Free (barely – 61,000 customers in the first nine months of 2018), but has been extending for three consecutive quarters. Still, this loss of customers worries the stock market as much; this activity is Iliad's cash cow and weighs nearly 75% of its Ebitda.

Finally, the specter of consolidation in telecoms has never been so far, as recalled Thursday morning the bosses of Orange and Bouygues. Which does not do Iliad's business either.

Xavier Niel's group is to announce its annual results on March 19th. Sure the markets will follow this presentation with interest and attention.

(c) Bloomberg screenshot
(c) Bloomberg screenshot

Nicolas Richaud

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