Free makes its first profit in Italy



Posted on Jul 30, 2021, 2:26 PMUpdated on Jul 30, 2021, 4:36 PM

“Complimenti, congratulations ! Three years after arriving in Italy on the mobile market, Iliad, the parent company of Free, posted its first positive result in the country, according to results released on Friday. In the first half of the year, Iliad Italia (the brand under which Free dans la Botte launched) posted a positive EBITDA (profit after rent) of 6 million euros. Against a loss of … 84 million in the first half of 2020 and even 133 million over the whole of last year.

The stakes were high for Xavier Niel, the founder-boss of Free. Italy is its first international foray as an operator. The group launched in mid-2018, with a single package, without commitment. Inside, unlimited calls and SMS and above all 30 gigabytes of data, all for only 6 euros per month. Objective, to seduce Italians disappointed by the practices considered opaque of their operators: hidden costs, invoiced messaging, etc.

10% of the Italian market

Three years later, Iliad has won over almost 8 million Italians – more than 10% of the market. Since the start of the year, 600,000 transalpine subscribers have joined, including 280,000 in the second quarter. The dynamic is however a hair below that of Free in 2012 in France, when it arrived on mobile. At the time, one year was enough for Xavier Niel to hold 7% of the market. A world record.

To conquer the Italians, Iliad has beefed up its distribution network, which did not exist three years ago. The group now has 19 shops, 2,000 indirect points of sale and 1,400 distribution points where customers can buy SIM cards. In April, Iliad had also acquired 12.4% of the capital of Unieuro – the first distributor of electronic products on the other side of the Alps, thus becoming its largest shareholder.

The recruitment of subscribers is logically reflected in the turnover. This increased by almost 23% in the first half, to 383 million euros. “In a complicated context due to the pandemic and a reduction in the rate of churn [désabonnement, NDLR] in the italian market, iliad italia’s growth remains solid, ”the group said in a press release.

An arrival on the fixed line market at the start of the school year

The positive result can also be explained by its investments in its mobile network. Iliad Italia now has 7,800 antennas on. This allows it to be less dependent on the networks of other operators, to which it leases access, for lack of yet having a national network. Iliad is targeting 8,500 sites by the end of the year, then 10,000 to 12,000 by the end of 2023.

Profitability will allow Iliad to prepare for its arrival on the fixed line market more calmly. At the start of the school year, the group intends to land in Italy with its Freeboxes. The operator will then be able to play the “convergence” card. In short, to offer both fixed and mobile offers to its customers, and thus better retain them over time.

Almost everything is ready. Last summer, the French group signed an agreement to access OpenFiber’s fiber networks. This wholesale operator currently has 6 million lines, which Iliad can sublet to connect its customers’ boxes.

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