PARIS--France's Iliad SA, which is trying to buy U.S. operator
T-Mobile, reported a fall in first-half net profit as strong
revenue growth was weighed by a one-off tax charge and the
amortization of costs related to deploying a 4G network in
France.
Net profit fell 1.3% to EUR139 million while revenue jumped
10.4% to EUR2.02 billion as the low cost operator continued to win
over new clients in a highly competitive market French mobile
market.
Iliad surprised the telecoms industry last month when it made a
surprise $15 billion takeover proposal for T-Mobile. The French
group founded by internet entrepreneur Xavier Niel only launched
mobile services in early 2012 but has quickly eaten into rival's
profits by kicking off a brutal price war with ultra-cheap
offers.
But Iliad's initial bid has run into roadblocks. T-Mobile US
Inc.'s chief financial officer earlier this month called the $15
billion takeover proposal "inadequate" although he hinted it may be
open to a higher offer. All eyes are now on Iliad to see if it will
improve its offer.
In its first half earnings report, Iliad did not comment further
on the offer.
The company sparked a tough price war when it entered the French
mobile market two years ago. Rivals Orange SA (ORA.FR), Vivendi
SA's (VIV.FR) SFR and Bouygues SA's (EN.FR) Bouygues Telecom have
seen profit tumble since, prompting operators to engage in efforts
to consolidate, which haven't materialized thus far.
Iliad--majority-owned by Mr. Niel--said its share of the French
mobile market stood at 13% at the end of June.
Mobile revenue rose 24% in the first half of the year EUR745.7
million.
-Write to Ruth Bender and William Horobin at
ruth.bender@wsj.com; william.horobin@wsj.com
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