PARIS May 11 The performance gap between
telecoms and cable group Altice NV and its listed SFR
Group division widened in the first quarter,
underscoring SFR's difficulties in attracting customers despite
heavy investments in infrastructure and content.
The holding company, founded by Franco-Israeli tycoon
Patrick Drahi, said on Thursday that its quarterly profits in
the United States grew ahead of a planned initial public
offering (IPO) while those of SFR in France dropped, along with
the number of customers in the country.
Altice's core operating profit rose by 9.5 percent over the
first three months of year to 2.24 billion euros ($2.43
billion), in line with a Reuters poll.
SFR's contribution to that amount was 820 million euros,
down by 5.1 percent from a year earlier. That figure compares
with the 896-million-euro core operating profit yielded by
Altice USA over the same period, representing an increase of
In both countries, Drahi is betting on the convergence of
content providers and telecommunications operators. He saw the
announcement of AT&T Inc's $85 billion acquisition of Time
Warner Inc as an additional proof of this trend.
In France, SFR bought the English Premier League's football
rights for the three seasons starting in 2016, paying more than
300 million euros for them.
SFR is also considered as one of the three biggest
contenders France for the TV rights of European soccer's
Champions League, along with Vivendi's pay-TV Canal
Plus and Qatari-controlled beIN Sports.
"We have conducted a few private transactions over the past
few months with shareholders who were keen on exchanging their
SFR shares against Altice shares. And in this field, we will
remain opportunistic," Altice's Chief Executive Michel Combes
Still, evaluating the impact of such investments on
customers' choices remains difficult.
"Yes, we believe that content has an impact on our figures,"
Combes said in a call with reporters. "It answers customers
expectations, it clearly supports our pricing strategy," he
SFR, France's second-biggest telecoms operator after Orange
, lost 351,000 mobile customers and 213,000 broadband
customers in the first quarter compared with the same period a
SFR's first-quarter core operating margin at 30.3 percent is
the worst on record since Drahi bought SFR in November 2014.
On the other side of the Atlantic, Altice USA, the cable
operator put together by the acquisitions of Cablevision and
Suddenlink Communications, filed for an IPO last month, seeking
to raise $1 billion to $2 billion, a source familiar with the
The division's chief executive declined to provide
additional details on the project.
"The number of shares to be offered and the price range for
the offering have yet to be determined," Dexter Goei, Altice
USA's chief executive, said in a conference call with reporters.
The group is expecting to receive comments from the U.S.
markets watchdog "sometime in May," Goei added.
Altice also reiterated its group targets for 2017, including
a revenue stabilization for SFR.
($1 = 0.9202 euro)
(Reporting by Mathieu Rosemain and Gwenaelle Barzic, editing by