Iliad is on a mission to become the fifth-largest mobile operator in Europe this year, backed by revenues totalling €10 billion across its major markets.

Mary Lennighan

March 14, 2024

3 Min Read

The ever-ambitious telco group made its latest growth prediction on Thursday alongside the publication of full-year results that showed strong growth in revenues, earnings and customer numbers.

But while Iliad made a clear statement of intent for the coming year, there's a little bit of unravelling to do to ascertain exactly what it means by those targets.

Iliad declared itself Europe's sixth-biggest mobile operator when it announced the acquisition of Poland's Play three and a half years ago. That assertion was based on mobile customers, excluding M2M. This time around, there's no small print to clarify the parameters of Iliad's ambition, but it's fairly safe to assume that they are similar.

However, Iliad Group CEO Thomas Reynaud muddied the waters a little with a statement on the subject.

"Iliad went all out to win in 2023, gaining strong market share in France, Italy and Poland. The Group also transformed itself during the year, in particular by investing massively in artificial intelligence, the Cloud and connectivity for businesses," Reynaud said. "We consolidated our robust financial position, enabling us to sign an agreement to become the main shareholder of Tele2 in early 2024 and to extend our geographic reach to eight countries. And we intend to stay on the winning track, as we're aiming to become Europe's fifth-largest telco this year!"

Aside from the fact that there is a significant difference between becoming the fifth-largest telco and fifth-largest mobile operator in Europe, Reynaud seems to have added an extra market to Iliad's footprint; the Tele2 deal will bring four new markets to add to its existing three of France, Italy and Poland. His reference to the Tele2 deal suggests that those new markets will help Iliad to become the number five operator in Europe, although the telcos has not expressly stated that that is the case. Nonetheless, inorganic customer growth is a perfectly usual way of boosting one's customer base.

However, Iliad's other main target for 2024, to reach €10 billion in revenues, must be based solely on its three current markets; adding Tele2 into the mix would put it well above that figure.

Essentially, Iliad is not exactly pulling a fast one here, but it is at least juxtaposing – if not comparing – apples and oranges here. And failing to be completely transparent in how it will measure that number five position.

In revenue terms, Iliad's three main markets turned in a combined top line of €9.24 billion in 2023, an increase of 10.4% on-year (or, as the small print shows, 8.2% on a pro forma like-for-like basis), a growth figure it claims is the highest among Europe's top 15 telcos last year. The biggest growth rate came in Iliad's smallest market, Italy, where revenues increased by almost 20% to exceed the €1 billion mark for the first time.

If Iliad is able to repeat that growth rate this year, it will hit its €10 billion target.

Consolidated EBITDAaL increased by 4.2% last year to €3.4 billion and capex declined, leading to operating free cash flow growth of 22.6% to €1.4 billion. However, profit more than halved to €318 million.

Iliad was pretty keen to talk about its net adds, claiming to lead the market in France, Italy and Poland in both mobile and fixed on that score. As a result, at the end of last year it had more than 15 million mobile subscribers in France, almost 14 million in Poland and 10 million in Italy. Add in the Tele2 markets, and that starts to look like a pretty big operator.

With the outgoing European Commission still banging the drum on cross-border consolidation in the EU, and Iliad's owner expanding his telecoms empire both through the telco and via his various investment vehicles, Iliad is fairly well set up to play a big role in European telecoms going forward. A pan-European telecoms market may be little more than a pipe dream, but Iliad is going to right way about building valuable scale in this sector.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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