Orange's revenue grew by 1.1% in Spain in 2023

Orange ‘s total revenue in Spain grew by 1.1% during fiscal year 2023, up to 4,698 million euros, “thanks to the growth of retail services (the sale of the operator’s services, +1.8% to 3,192 million ) during the four quarters, driven by convergence services (landline+mobile+TV)” according to the company. The arpo (average revenue per client) has grown every quarter. It is the first time that Orange Spain has managed to increase retail income since 2018.

Wholesale income, one of the fundamental pieces of Orange ‘s business in Spain, decreased by 9.6%, and stood at 793 million, while the sale of equipment – fundamentally the sale of mobile phones, tablets and other devices – it shot up 12.5% to 711 million.

The company has noted that “in a very competitive market, Spain continues to maintain its growth by concentrating on customer value management, along with a rigorous promotions policy.” This trend has become widespread in the industry, especially in the high and medium segment, and for at least two years now the competition for promotions between operators in the market has been substantially reduced, which has in turn caused a lowering of portability, when the client changes operators. The French group has also indicated that its business is growing in all B2B segments, that is, the corporate business, from the self-employed and the SME to the large account,

The gross operating margin (ebitdaal) stood at 1,246 million and achieved a strong rebound, with a growth of 12.2%. At the same time, capex (material investment, mainly in telecom networks and IT systems) was reduced substantially, by 12.2% to 755 million.

Fourth trimester

In the fourth quarter of 2023, total revenues fell 0.5% year-on-year, to 1,198 million, fundamentally dragged down by the sharp drop in wholesale revenues, which fell 16% to 197 million, as revenues for retail, of 802 million, they achieved an increase of 1.5%. This increase in retail income in the fourth quarter of 2023 compares with the falls of 10.6% in the fourth quarter of 2020, -5.4% in the last quarter of 2021 and -0.2% in the fourth quarter of 2022, reflecting a trend of improvement in the fundamental segment of the operator’s income.

Margins

The company highlighted in its presentation that ebitdaal for the second half of the year grew by 13.3% after also growing by 11% in the first half. And this increase in ebitdaal, together with the decrease in investments (capex) have catapulted the cash, (ebitdaal minus capex) which has experienced a growth of 243 million year-on-year.

Merger with Orange

The French company indicated that it expects the financial and legal closing of its merger with MásMóvil in Spain at the end of the first quarter of 2024, since it “trusts” that the European Commission will rule on February 22, as was already announced by the Community executive. Orange and MásMóvil have already reached a final agreement with the European Commission, as EXPANSIÓN announced yesterday, about the remedies they must grant to Digi, to achieve the community green light.

Fewer broadband customers

Fixed broadband clients stood at 3,938 million, which represents at least 8 consecutive quarters of decline, since in the first quarter of 2002 they stood at 4,022 million. In the fourth quarter of 2022 they stood at 3,982 million, so the 3,938 million now represents a year-on-year drop of 44,000, 1.1% less. On the other hand, FTTH fiber clients rose to 3.6 million, compared to 3.56 a year before, adding 37,000 in the year. The operator already only has 214,000 ADSL customers, on copper lines, which will be gradually turned off throughout the year. All operators have been transferring their customer bases from ADSL to fiber optic services in recent years and Orange is no exception.

In the mobile market, contract customers (excluding M2M or IoT customers that connect machines to each other) stood at 11,523 million, with a drop of 50,000 compared to the third quarter of 2023, although it represents an increase of another 50,000 over the 11,473 with which 2022 ended.

More fiber

The operator has continued to deploy its fiber optic network and has reached coverage of 17,101 million real estate units (homes, offices and premises), which means having added 379,000 more homes in the last year.

Downsizing

The total workforce of Orange subsidiaries in Spain, including telemarketing platforms, stood at 6,528 employees at the end of fiscal year 2023, which is 95 less than in the previous quarter and 70 less than the 6,598 workers at the end of 2022.

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