Iliad Financial Results 2007Wednesday, March 12th, 2008
As of December 31, 2007: 64.5% of subscribers using Free as unique Telecom Provider; 100% of subscribers accessing TV; Over 80% of subscribers accessing Pay TV Services
During 2007, Iliad delivered strong operational and financial growth. The Group’s strategy, which is based on the unbundling of the local loop and growing use of optional value-added services with the Freebox, has enabled a significant improvement in the Group’s profitability.
ISP revenues (Free, Free Télécom and Free Haut Débit), through both the switched telephone network and ADSL, totaled €1,149.9 million for 2007, an increase of 40.4% over 2006. The main growth factors were as follows:
- The continuing success of the Broadband offer. The number of ADSL subscribers rose to 2,904,000 at December 31, 2007 from 2,278,000 one year earlier. Subscriber acquisition remained strong in 2007, with Free signing up 22.3% of total new ADSL subscribers in France, representing 626,000 net adds for the year. At December 31, 2007 Free’s share of the French ADSL market was over 19.7%, versus 19.0% at end-2006.
- Free’s continuing drive to increase the proportion of unbundled subscribers. At December 31, 2007 the unbundled subscriber rate was 81.57% versus 75.9% at end-2006.
- The growing use of optional value-added services provided through the Freebox. In 2007, revenues generated from these services totaled €263.4 million versus €163.4 million in 2006. At December 31, 2007 optional value-added services represented approximately 22.4% of total Group revenues compared with 3.4% at December 31, 2004.
2005 2006 2007 Total ADSL subscribers 1,595,000 2,278,000 2,904,000 Unbundled subscribers 1,120,000 1,730,000 2,366,000 Percentage of unbundled subscribers 70.2% 75.9% 81.5% Share of French residential ADSL market 18.0% 19.0% 19.7%
Television via ADSL. Since December 2003, subscribers to broadband Internet via the Freebox (in unbundled areas and subject to line eligibility) have been offered a television service with more than 257 channels, including 144 free channels as of December 2007. Revenues generated by pay TV channels are included within the revenues of the Broadband segment. Since November 2004, Canal+ Group channels can also be accessed, and the French national channels TF1 and M6 have been available since 2007. Subscribers to Canal+ Group channels are billed directly by the Canal+ Group, which pays a commission to Free. Since July 31, 2007 all Free Haut Débit broadband subscribers (in unbundled and non-unbundled areas and subject to line eligibility) can access a selection of TV channels from Free’s portal.
Video on demand (VoD) via ADSL. Since December 2005, subscribers to broadband Internet via the Freebox (in unbundled areas and subject to line eligibility) have been offered a video on demand service operated jointly with the Canal+ Group, TF1 and M6. This service enables subscribers to access a catalog of movies 24 hours a day, 7 days a week, and view them on their television. The movies – which are ordered using the Freebox remote control – include DVD player features and may be viewed for a period of 24 hours. The price of the movies, which starts from €0.99, is invoiced directly on the subscriber’s Free Haut Débit bill.
Subscription-based video on demand (S-VoD) via ADSL. Since June 2007, subscribers to broadband Internet via the Freebox (in unbundled areas and subject to line eligibility) have been offered a subscription-based video on demand service. For €5.99 a month, subscribers with the basic Free Home Vidéo package have unlimited 24/7 access to a selection of more than 50 films and 100 TV series episodes that are renewed each week. In January 2008, this offering was rounded out to include Free Home Vidéo Intégrale, a new service giving subscribers unlimited access to a full range of content including movies, TV series, music programs, family shows and HD broadcasts.