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The Ilias action in free fall, free strategy involved?



Ilias
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The share price of the parent company has been in free fall since the beginning of the year. The Delta Freebox, supposed to give a new breath to the fixed activity, seems to make a very disappointing start.

Time is not really good in Free. The operator is currently experiencing a very violent fall in his scholarship. The action Iliad lost 5.22% Friday to € 90, a level that she did not know since 2012, the early hours of her mobile phone offer.

Iliad loses half of its value in one year

Since the beginning of 2019 the action has literally submerged 26.59%. It is the only operator in the French landscape that experiences such enormous deterioration, Orange is stable and Altice has increased by 7%. The Iliad group lost more than half of the value (-53%) in one year.

The reasons for such a fall are numerous. First, Free a drop subscribers in 2018 in the fixed, a first since the launch of the operator in the landscape of French telecom. The stock market quickly approved this announcement, with Free realizing most of its income (and its margin) from its internet subscribers.

The Delta Freebox does not unleash the crowds

The second reason would be the disappointing sale of the new Freebox Delta. Xavier Niel created the event during the presentation of his last box, but the customers would not have ended up there, between too high a price and many added services that the public does not care about for the operator's preference: the technophiles.

Iliad did not give figures in 2 months of marketing, where operators like to communicate quickly about the first sales indicators. The only evidence of this lack of interest in the Freebox Delta comes from attendance from the Free website. They show no increase traffic since the launch of the new box last December.

Iliad could go through other difficult neighborhoods

The future does not seem particularly optimistic for Iliad. Financial analysts expect a slump revenue of 4.7 in the fourth quarter of 2018, including the first subscriptions to the Freebox Delta. And despite the very low sales figures, customers are still waiting for their equipment.

The other concern comes from the development of Iliad in Italy through its mobile offer. Despite its unmistakable commercial success (2.2 million customers in less than a year), analysts point out that these subscribers are recruited with cheap packages, with little margin and rely on to lose estimated at 33 million euros. Free will have to convert its subscribers into more expensive deals to find the path of growth.

Iliad still retains its target of an EBITDA (profit before tax) of one billion euros in 2020. The financial companies are categorical: they will be 30% lower than these forecasts.

Source: AGEFI


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