registration document France Telecom 2009 - Orange.com

9 ANALYSIS
analysis of the financial position and earnings
OF THE GROUP’S FINANCIAL POSITION AND EARNINGS
On a comparable basis, personal communication services
revenues in Spain increased by 0.2% between 2007 and 2008.
This change resulted from i) a 2.6% increase in the total number
of customers to 11.4 million as of December 31, 2008, including
an 8.0% increase in the number of customers on contracts and
a 102.9% increase in the number of broadband customers,
partially offset by ii) a 3.3% fall in ARPU due to the reduction
in rates and the impact of cuts to call termination prices, as
well as more muted growth in usage (AUPU) with the economic
slowdown.
Home Communication Services in Spain
2009 vs. 2008
On a historical basis and on a comparable basis, home
communication services revenues in Spain fell by 4.9% to
671 million euros between 2008 and 2009. The decline resulted
from falls in business services revenues and wholesale activity,
partially offset by increased broadband revenues. The increase
of roughly 1.7% in broadband revenues stemmed in large part
from a 3% increase in broadband ARPU, partially offset by a
6.7% fall in the number of customers.
2008 vs. 2007
On a comparable basis, home communication services
revenues in Spain increased by 4.3% (22.7% on a historical
basis) to 705 million euros between 2007 and 2008, due in large
part to the adoption of “All in One” offers.
9.1.3.3.2 EBITDA - Spain
2009 vs. 2008
On a historical basis and on a comparable basis, the EBITDA
of the Spain operating segment increased by 18.8% to 729
million euros between 2008 and 2009. This 115 million euro
increase year-on-year was mainly attributable to i) a 170 million
euro reduction in service fees and inter-operator costs, in line
with growth in unbundling and cuts to call termination prices, ii)
a 36 million euro reduction in commercial expenses, stemming
largely from lower mobile customer acquisition costs, and
iii) a 36 million euro fall in restructuring costs. These positive
effects were partially offset by a 180 million euro fall in revenues
between 2008 and 2009.
2008 vs. 2007
On a historical basis, the EBITDA of the Spain operating
segment fell by 7.2% to 614 million euros between 2007 and
2008, due mainly to the negative impact of changes in the
scope of consolidation and other changes, which amounted to
76 million euros year-on-year.
On a comparable basis, the EBITDA of the Spain operating
segment increased by 4.8% between 2007 and 2008. The
improvement stemmed largely from a reduction in customer
acquisition costs, a fall in other operating expenses (net of other
operating income) and a fall in advertising expenditure. These
reduced expenses were partially offset by customer-retention
efforts and an increase in provisions on trade receivables linked
to the economic environment.
9.1.3.3.3 Operating income - Spain
2009 vs. 2008
On a historical basis and on a comparable basis, the
operating income of the Spain operating segment increased
by 56.5% between 2008 and 2009, due to the recognition of
impairment of goodwill in 2008, the increase in EBITDA and
reduced depreciation and amortization.
2008 vs. 2007
On a historical basis, the operating income of the Spain
operating segment fell by 34.1% between 2007 and 2008
(11.7% on a comparable basis), due mainly to impairment of
goodwill totaling 140 million euros, based on the market value of
the fi xed-line business in Spain. This valuation refl ected a sharp
fall in the market value of revenues per broadband subscriber
observed in comparable transactions in 2008.
9.1.3.3.4 Capital expenditures on tangible and
intangible assets excluding licenses -
Spain
2009 vs. 2008
On a historical basis and on a comparable basis, the capital
expenditures on tangible and intangible assets excluding
licenses fell by 129 million euros to 440 million euros between
2008 and 2009, mainly due to reduced equipment investments
by broadband customers and the recycling of returned
equipment.
2008 vs. 2007
On a historical basis, the capital expenditures on tangible and
intangible assets excluding licenses fell by 8.9% or 55 million
euros between 2007 and 2008.
On a comparable basis, the 11.5% or 74 million euros fall in the
capital expenditures on tangible and intangible assets excluding
licenses between 2007 and 2008 was linked to the fall in capital
expenditures on the mobile businesses, attributable mainly to
reduced investments on the 2G network.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM