Clouds are gathering over the head of the second French telecom operator. Beyond the abysmal debt of more than 24 billion euros from its parent company Altice, SFR shows 2023 results at half mast. Its turnover fell by 1.3% to 11.16 billion euros while its operating profit before provisions and depreciation (Ebitda) fell by 4.3% to 3.9 billion euros.
SFR is unable to stop the flight of its subscribers who have already been at work for many months. Out of a total of more than 26.8 million customers, the red square brand lost nearly half a million customers last year, i.e. 158,000 in fixed lines (optical fiber, ADSL) and 315 000 in mobile. On the principle of communicating vessels, this hemorrhage benefits its competitors, Orange, Bouygues Telecom and especially Free garnering new subscribers.
Discreet increase in prices
Failing to retain its subscribers, SFR is trying to increase the average revenue per subscriber (Arpu). Moving away from its traditional policy of discounted prices, the operator has ended most of its promotional offers. In the inflationary context, it is also increasing its prices, like its competitors, with the exception of Free which has frozen its prices until 2027. Recently, SFR discreetly modified its price list on its fixed internet offers with increases from 3% to almost 10%, observes the Phonandroid site.
SFR also suffers from poor customer satisfaction linked to network quality or customer service. According to a survey carried out by the ZoneADSL comparator among more than 10,000 consumers, the group comes last in the ranking of the French’s favorite operators with a rating of 2.9 out of 5. Its internet boxes – Starter and Power – are also among the less appreciated.
Weight of debt and legal hassles
The disenchantment with subscribers could continue this year. Asked by The echoesDennis Okhuijsen, director of Altice Europe, expects revenues to decline in 2024, in particular due to a slowdown in the deployment of fiber optic networks and “ a residential market that remains competitive, particularly on mobile “.
Finally, SFR suffers from debt pressure, greater than six times its Ebitda. In November, Patrick Drahi’s group set itself the objective of reducing this ratio to 4.5 ” medium term “. After selling its data centers and its media activity (BFM, RMC), it could be required to sell other assets such as Meo, the leading Portuguese operator, or Teads, a French specialist in online advertising video.
The sale to Bouygues Telecom of La Poste Mobile of which SFR is a 49% co-shareholder could bring it more than 450 million euros provided that it gives its agreement. According to The world, Altice is still hesitant. “ It is examining the possibility of exercising its right of pre-emption to keep this virtual operator in its fold.”
Altice’s troubles are also legal. After Portugal, the National Financial Prosecutor’s Office opened, in September, a preliminary investigation into the alleged corruption case of Armando Pereira, former number of the group, Bloomberg revealed on March 8.