FT writedown hits bottom line, warns of tough 2013

France Telecom has posted revenues of EUR43.5 billion (USD58.2 billion) for the year ending 31 December 2012, down 3.9% year-on-year, in part due to significant price pressures in its domestic market and weakness at its Polish unit. Net income attributable to shareholders plunged 79% to EUR820 million following a EUR1.84 billion writedown on operations in Poland, Egypt and Romania. CFO Gervais Pellissier stated that the French company was targeting quadruple-play bundles as it seeks to boost customer loyalty. ‘About 30% of our fixed customer base and 20% of the mobile base are on quad-play plans,’ the executive stated, before adding that the company was also investing heavily in LTE infrastructure and fibre broadband. However, Pellissier warned that pricing pressures would continue, saying that ARPU in France fell 10% in 2012 and would fall ‘at least 10%’ in 2013, and that ‘the pressure on prices will be worse in 2013 than we thought’. The telco, which is 27%-owned by the French government, reduced operating costs by EUR284 million in 2012 and expects to reduce costs by a further EUR500 million this year.