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Europe: Orange increases cost-cuts to lose less juice

French telecom operator Orange showed more signs of stabilizing when it released results for the first half of 2014 . To keep its momentum, the telecom upped its cost cutting goal to about $402 million from its previous goal of $334 million.
Orange posted revenues of approximately $26.25 billion through the first half of the year, which was down 3.6% compared with 2013. Earnings before interest, taxes and depreciation came in at $8.23 billion, resulting in a margin of 31.3%, unchanged compared to the first half of 2013.
“These results demonstrate the company’s strength and ability to react in market conditions that continue to be very challenging,” said CEO Stéphane Richard. “We’ve maintained our commercial momentum, despite a hyper-competitive environment, largely due to the investments we’ve made in very high-speed broadband, fiber and 4G.”
At the end of the first quarter, the company predicted an end to the brutal price war in its home market of France, and Richard seems to be betting on quality rather than price to maintain Orange’s leadership position in the country.
“The quality of Orange’s fixed and mobile networks is widely recognized and this has allowed us to differentiate ourselves even more,” Richard said. “It is clear that consumers are not just focused on price but are also sensitive to quality and service.”
Orange may also be looking to conserve that quality because the company declared it will not carry Netflix’s streaming video service on its set-top boxes when the over-the-top service arrives in Europe this fall. Netflix is planning to launch in Germany, France, Austria, Switzerland, Belgium and Luxembourg in September.

More telecom news from Europe:

KPN Q2 earnings beat low expectations: The Dutch telecom operator posted a 19% drop in second quarter EBITDA, falling to $848 million. That results still beat expectations of $829 million, according to analysts’ average estimate compiled by Bloomberg.
London Mayor promises “5G” in the city within six years: Mayor Boris Johnson said the U.K. capital will deploy the world’s first 5G mobile network by 2020. Johnson’s 5G pledge is part of his long-term infrastructure investment plan for London, which the mayor is expected to unveil later this week. U.K. operators began rolling out LTE-based services in late 2012, with recent network improvements deployed to boost network performance to match official guidelines for what is considered “4G.”
The Austrian government intends to keep a 28.4% blocking minority in Telekom Austria: After billionaire Carlos Slim’s América Móvil secured a majority in Telekom Austria, the Austrian state holding company OIAG is likely to keep its stake – and its veto power – in the carrier. OAIG head Rudolf Kemler told the Kurier newspaper that it was good “to have a cushion so as not to be diluted to below a blocking minority.”
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ABOUT AUTHOR

Sara Zaske
Sara Zaske
Contributor, [email protected] Sara Zaske covers European carrier news for RCR Wireless News from Berlin, Germany. She has more than ten years experience in communications. Prior to moving to Germany, she worked as the communications director for the Oregon State University Foundation. She is also a former reporter with the San Francisco Examiner and Independent, where she covered development, transportation and other issues in the City of San Francisco and San Mateo County. Follow her on Twitter @szaske