By Sam Schechner
PARIS--Iliad SA (ILD.FR) said Friday its new low-cost mobile
phone service has grabbed 5.4% of France's mobile market in less
than six months, reshaping both the strategies of rivals like
Vivendi SA (VIV.FR) and the everyday behavior of cellphone
customers.
Iliad's carrier, Free Mobile, has attracted 3.6 million
subscribers in France since launching in January. However, its net
income for the first half fell 45% to 80 million euros ($100
million) in part because of higher expenses to build the mobile
service, which itself still loses money.
Overall consolidated earnings before accounting interest, tax,
depreciation and amortization--a key figure for the
telecommunications business--were roughly flat on the year at
EUR417 million. But Free Mobile alone posted a EUR44 million Ebitda
loss, which was offset by growth in Free's fixed-line
Internet-TV-phone services, also sold under the Free name.
Overall revenue soared 38% to EUR1.44 billion, as the droves of
new mobile customers added EUR320 million to the top line.
The fast adoption of the mobile service illustrates how quickly
Iliad and its maverick chief executive, Xavier Niel, have reshaped
the mobile-phone landscape in France--and potentially offered an
example for other upstarts around the globe.
Free's mobile-service plans--one at EUR2 per month, and another
with data service at EUR20 per month--shocked its much more pricey
rivals in France, leading to an overall price reset from rivals
such as France Telecom (FTE), Vivendi's SFR and Bouygues SA's
(EN.FR) Bouygues Telecom.
Iliad's stock closed Thursday at EUR120.65, up by a quarter
since early May.
-Write to Sam Schechner at sam.schechner@wsj.com
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