Just the day that Orange Spain presented its quarterly results, the Group announced a accounting adjustment in the subsidiary in our country of 3,700 million euros. As explained Jean-François Fallacher, CEO of the companyThis impairment can be explained by “an environment of increasing hypercompetitiveness, marked by the erosion of revenues in the telco sector in recent years and also due to the uncertainties related to the economic recovery in the short term.”
The manager has clarified that this adjustment “It has no impact on our strategic priorities, our liquidity or our investment capacity. We are at cruising speed in investment in both fiber and 5G ”, he stressed. He has also stressed that the Spanish telecommunications market has two types of players: the three main operators that invest in the market and others that use the networks, but do not invest in them and are breaking the market. “The challenge we face is striking the right balance between those who invest and those who do not.”
Precisely, this price war in which the low cost weighs more and more has caused the operator to enter our country during the first half of the year 2,368 million euros, 5.1% less So what its ebitda fell by 16.2% to 610 million. However, although these results are negative, the truth is that the company is improving trend and the curve begins to rise.
Results Orange Spain first semester 2021.
As it is, the retail services decreased by 9.2% to 1,614 million, as did the wholesale services 1.4% totaling 443 million euros. In this segment, they have awaited the return to the roaming business (which has impacted on their results) and are preparing for a potential renegotiation with MásMóvil if the purchase of Euskaltel.
On the other side of the scale, telco leads the market in device sales with 310 million euros, growing over 20%. In fact, the subsidiary has highlighted its clear focus on terminals, with the commercialization of one million smartphones sold in the analyzed period (half of which were 5G).
With respect to business performance, Orange Spain has registered a growth in customers both in convergence, as in fiber and mobile. Its strategy in this area is a multi-brand proposal to get the most out of each one: Orange, as an alternative reference brand; Jazztel in the middle sector and Simyo (with República Móvil already fully integrated) and Amena in low cost. For each of them they have adjusted their rates with both data and content. Regarding content, Orange defends its interest in football, but acknowledges that it represents a high cost for its accounts. This affects the need to monetize it and will translate into a raise of 5 euros which will be complemented with improvements in connectivity. They will give all the competitions and the conditions of the signed contract are similar to those of the previous season. However, he considers that the formula that is given in our country is very expensive, and they have made it known to the local authorities.
Likewise, the telco confirm your bet on the services with his Bank as a star service with more than 115,000 clients and 400 million euros financed. Another of its proposal is Orange Seguros, which has just added the home insurance to life and commerce.
While in the business sector has registered a growth of 5.7% thanks to its important role in the Public Administration and in large companies.
With regard to networks, Orange closed the first six months of the year with 626 municipalities with 5G, 37% coverage, and they want to reach 50% by the end of the year. For that they have acquired a greater amount of 5G spectrum. In parallel, they continue with the deployment FTTH with 15.7 million homes in the analyzed semester.
Fallacher thanked the Government for the action of the Government regarding the European recovery funds, the promotion of the digitization of the business fabric, the elimination of fees and the 5G spectrum auction, measures that “will help the sector’s medium or long-term recovery” .
400 voluntary departures
Last quarter Orange Spain announced that it was going to carry out a staff readjustment plan. Said plan was announced on May 14 and on June 30 an agreement was reached with the social representation for 400 voluntary departures in central services (12% of the workforce), excluding key commercial and technical profiles. This measure will run between July 2021 and February 2022. In addition, a Premium outplacement service will accompany the employees who have joined this march in its new stage. Logically, these dismissals “will give us the ability to maneuver to adapt to the market”, that is, to undertake programs of retraining and training in digital skills and services.
Priorities for the second semester
1.Accelerate commercial performance, prioritizing excellence in customer service and accompanying them in the digitization process
2. Promote the development of 5G to contribute to the economic recovery and digitization of the country
3. Transform the company to adapt to market changes and the macroeconomic context
4. Confirm the commitment as a large investor in Spain, focused on reducing the digital, territorial and educational gap.