REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

More documents

Recommendations

Info

9. OPERATING AND FINANCIAL REVIEW 9.1 KEY CONSOLIDATED FINANCIAL DATA 9.1.1 MANAGEMENT REPORT 9.1.1.1 Overview The Group’s operations are made up of two business segments defined based on operating criteria: • The Broadband segment, which includes Internet service provider operations (marketed under Free and related brands), hosting services (the Online, BookMyName and Dedibox brands), call center operations (Centrapel and Total Call), Wimax activities (operated by IFW), and operations related to the rollout of the FTTH (fiber-to-the-home) optical fiber network (Free Infrastructure, IRE, Immobilière Iliad and Citéfibre). • The Traditional Telephony segment, which includes switched fixed-line telephony (One.Tel and Iliad Telecom), resale of airtime to operators (Kedra), directory services (mainly the ANNU reverse look-up directory accessible by Minitel, telephone, Internet and SMS text messaging) and e-commerce operations (Assunet.com). ADSL broadband and optional value-added services, combined within the Broadband segment, represent the dominant source of revenue, while revenues from the Group’s other offerings, combined within the Traditional Telephony segment, are declining as planned. In 2007 the Broadband segment accounted for almost 98% of the Group’s total revenues excluding inter-segment sales. These business segments may change in the future, depending on operating criteria and the development of the Group’s operations. There were no significant changes in Group structure during 2007. On February 7, 2007 Iliad sold its entire interest in Kertel SA to Proximania. Kertel was no longer considered a strategic business in light of the Group’s operating focus on broadband and high speed broadband. The consolidated financial statements of the Iliad Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union at the balance sheet date. 9.1.1.1.1 Breakdown of revenues (1) Broadband revenues • Unlimited ADSL broadband offer. Since October 2002, Free has offered its subscribers unlimited broadband access for €29.99 per month (including VAT). An ADSL modem is supplied free of charge and no charge is made for installation. This unique offer allows subscribers to access the Internet at a speed of at least 2 MB per second and up to 28 MB (observed) in areas where the local loop is unbundled (which depends on whether a subscriber’s line is eligible). Subscribers are billed by Free and pay by monthly direct debit. Subscribers who cancel their subscription are charged a termination fee, also paid by direct debit. The fee amounts to €96 (including VAT) less €3 for every month of their prior subscription period, and covers the cost of activating their line. • Television services, which are taxed at the reduced VAT rate of 5.5%, represented 56% of the Freebox subscription fee until 2007. Since January 1, 2008, this proportion has been reduced to 50% in accordance with new tax regulations. • Telephony via ADSL. Since August 2003 (unbundled areas) and March 2004 (non-unbundled areas), subscribers to the Free Haut Débit broadband service who are equipped with a Freebox modem have also been offered a telephony service. Under this service, telephone calls made through the Freebox to another Freebox subscriber or to any number in mainland France (excluding short numbers and special numbers), the Reunion islands, Guadeloupe, and 70 foreign countries are completely free. Revenues generated by calls to French mobile phones and to international numbers not included in the package, as well as revenues generated by incoming calls to Freebox subscribers, are included within the revenues of the Broadband segment. 64 - Iliad – Registration Document 2007
9. OPERATING AND FINANCIAL REVIEW 9.1 KEY CONSOLIDATED FINANCIAL DATA • Free’s preselection offer. Since June 2005, Free Haut Débit broadband subscribers have been able to apply for a preselection offering where they have not opted for full unbundling. By signing up with the Free preselection service, the subscriber authorizes the company to make a preselection request to France Télécom so that all calls made from the designated fixed line can be transferred to and billed by Free (excluding special numbers). This enables the subscriber to benefit from Free’s rates on all local, national and international calls, as well as on calls to mobile phones. • Television via ADSL. Since December 2003, subscribers to broadband Internet via the Freebox (in unbundled areas and subject to line eligibility) have been offered a television service with more than 257 channels, including 144 free channels as of December 2007. Revenues generated by pay TV channels are included within the revenues of the Broadband segment. Since November 2004, Canal+ Group channels can also be accessed, and the French national channels TF1 and M6 have been available since 2007. Subscribers to Canal+ Group channels are billed directly by the Canal+ Group, which pays a commission to Free. Since July 31, 2007 all Free Haut Débit broadband subscribers (in unbundled and non-unbundled areas and subject to line eligibility) can access a selection of TV channels from Free’s portal. • Video on demand (VoD) via ADSL. Since December 2005, subscribers to broadband Internet via the Freebox (in unbundled areas and subject to line eligibility) have been offered a video on demand service operated jointly with the Canal+ Group, TF1 and M6. This service enables subscribers to access a catalog of movies 24 hours a day, 7 days a week, and view them on their television. The movies – which are ordered using the Freebox remote control – include DVD player features and may be viewed for a period of 24 hours. The price of the movies, which starts from €0.99, is invoiced directly on the subscriber’s Free Haut Débit bill. • Subscription-based video on demand (S-VoD) via ADSL. Since June 2007, subscribers to broadband Internet via the Freebox (in unbundled areas and subject to line eligibility) have been offered a subscription-based video on demand service. For €5.99 a month, subscribers with the basic Free Home Vidéo package have unlimited 24/7 access to a selection of more than 50 films and 100 TV series episodes that are renewed each week. In January 2008, this offering was rounded out to include Free Home Vidéo Intégrale, a new service giving subscribers unlimited access to a full range of content including movies, TV series, music programs, family shows and HD broadcasts. • Migration to the fully unbundled service and modem replacement offering. Since June 2004, Free Haut Débit broadband subscribers can request migration from partially to fully unbundled access. The migration fee is €90 (including VAT), less a discount per month of the prior subscription period. In addition, since September 2004, subscribers who have Sagem modems can receive a Freebox modem in return for a €60 administrative fee for people who have held a subscription for less than one year and €30 for those who have been subscribers for between 12 and 24 months, while subscribers with a Freebox modem can receive an upgraded version in return for a €90, €60, or €30 administrative fee depending on the length of time they have held a subscription. Since October 2007 subscribers to the Free IP ADSL service can request migration to the Freebox Only offering. The fee is €90 (including VAT), less a discount of €3 per month of the prior subscription period. • “Pay-as-you-go” access. For this no-subscription dial-up offer, the customer pays the price of the phone call invoiced by France Télécom. Subscribers dial the Free access number (08 60 92 20 00) from any fixed line in France, and the call is charged by France Télécom at the local Internet rate. Revenues from the “Pay-as-you-go” offer are therefore directly related to the time customers spend online and to the revenue-share passed on to Free by France Télécom. Free invoices France Télécom on a monthly basis. The customer pays France Télécom a connection charge of €0.106 (including VAT) and a flat rate of €0.02 per minute (including VAT), applicable 24/7, excluding special offers. The share of airtime revenue passed on by France Télécom to Free as the operator of an interconnected network amounts to €0.0227 before VAT per minute of use (rate at December 31, 2007). The amount per minute is calculated by France Télécom and is approved by the French telecommunications and postal regulator (Arcep). • The “50-hour plan”. Under the “50-hour plan”, the subscriber is entitled to 50 hours of dial-up Internet access per month for a flat fee of €14.94 (including VAT). The subscriber connects to the Internet by Iliad – Registration Document 2007 - 65
Page 1 and 2:
Société anonyme. Share capital:
Page 3 and 4:
TABLE OF CONTENTS GENERAL COMMENTS
Page 5 and 6:
16.2 SERVICE CONTRACTS ENTERED INTO
Page 7 and 8:
1. PERSONS RESPONSIBLE 1.1 PERSON R
Page 9 and 10:
3. SELECTED FINANCIAL INFORMATION 3
Page 11 and 12:
4. RISK FACTORS 4.1 RISKS RELATING
Page 13 and 14:
4. RISK FACTORS 4.3 FINANCIAL RISKS
Page 15 and 16:
4.4 LEGAL RISKS 4.4.1 Risks relatin
Page 17 and 18:
4. RISK FACTORS 4.4 LEGAL RISKS The
Page 19 and 20: 5. INFORMATION ABOUT THE COMPANY AN
Page 21 and 22: 2007 • Sale of Kertel (February 2
Page 27 and 28: Considering acquisition opportuniti
Page 29 and 30: The Group’s network has been deve
Page 31 and 32: Réseau International CTI (Centre d
Page 33 and 34: 6. OVERVIEW OF THE GROUP’S BUSINE
Page 37 and 38: The following tables give details o
Page 45 and 46: 6.2 PRINCIPAL MARKETS 6.2.1 Interne
Page 57 and 58: Local loop unbundling 6. OVERVIEW O
Page 61 and 62: 6.6.2 Regulation of the content of
Page 67 and 68: 7.2 ORGANIZATION CHART At March 31,
Page 69: 9.1 KEY CONSOLIDATED FINANCIAL DATA
Page 73 and 74: 9. OPERATING AND FINANCIAL REVIEW 9
Page 81 and 82: 9.1.2 ADDITIONAL INFORMATION 9.1.2.
Page 83 and 84: 11. RESEARCH AND DEVELOPMENT, PATEN
Page 85 and 86: 13. PROFIT FORECASTS OR ESTIMATES T
Page 87 and 88: 14. ADMINISTRATIVE, MANAGEMENT AND
Page 93 and 94: 15. COMPENSATION AND BENEFITS 15.2
Page 95 and 96: 16. FUNCTIONING OF THE COMPANY’S
Page 107 and 108: 17.1 HUMAN RESOURCES 17. EMPLOYEES
Page 109 and 110: 18.1 IDENTIFICATION OF SHAREHOLDERS
Page 111 and 112: 19. RELATED PARTY TRANSACTIONS 19.
Page 113 and 114: 20. FINANCIAL INFORMATION CONCERNIN
Page 121 and 122:
20. FINANCIAL INFORMATION CONCERNIN
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
2.3.4 List of subsidiaries and affi
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
21.1 SHARE CAPITAL 21.1.1 Amount of
Page 197 and 198:
21. ADDITIONAL INFORMATION 21.1 SHA
Page 199 and 200:
Page 201 and 202:
21.1.8 Authorized unissued share ca
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
21.4.2 Changes in the Iliad share p
Page 209 and 210:
Not applicable. 23. THIRD PARTY INF
Page 211 and 212:
25. INFORMATION ON SHAREHOLDINGS 25
Page 213 and 214:
GLOSSARY Broadband ARPU (Average Re
Page 215 and 216:
GLOSSARY IP (Internet Protocol): te
Page 217 and 218:
GLOSSARY Spamming: the bulk mailing
Page 220:
RR Donnelley : 01 53 45 19 00
show all

REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

Create successful ePaper yourself

Delete template?

Save as template?