Orange's Bet on Spain Pays Off With Quarterly Earnings Beat

Orange is taking lessons from a price war in France beyond its home market to Spain, where a push to win subscribers paid off with a second-quarter earnings beat, according to Bloomberg.

The French telecom carrier is winning phone, internet and TV customers to the detriment of rivals in Spain, where the entrance of Masmovil Ibercom as a fourth operator in 2016 added competitive pressure. Comparable sales rose 1.8 percent for Orange in Spain, where it now has 2.6 million fiber broadband customers, compared with a 0.6 percent gain in France.

It’s a beautiful dynamic in Spain, CEO Ramon Fernandez said on a call with reporters. The telecom carrier, No. 2 overall after former monopoly Telefonica, is now the top provider of 4G mobile services, he said. The focus on Spain is part of the French incumbent’s ambition to become a bigger carrier in Europe and beyond. Orange CEO Stephane Richard has prioritized growth in French-speaking African markets and recently said he could expand into Portugal, saying that the operations of Altice’s local unit could interest Orange, though Altice said this month it isn’t for sale.

Adjusted earnings before interest, taxes, depreciation and amortization increased 3 percent to 3.38 billion euros for Orange, higher than the 3.35 billion average of four analysts’ estimates compiled by Bloomberg. The company reiterated plans for 7.4 billion euros of capital spending this year.