Telecom group Iliad's core profit rises on strong France and Italy sales

By Victor Goury-Laffont

(Reuters) -French telecoms provider Iliad reported a 5.1% rise in nine-month core profit on Tuesday, boosted by strong subscription growth in France and Italy.

The results reflect a trend among its main French rivals, with Orange, Bouygues Telecom and SFR all reporting slight profit growth year-on-year.

Iliad's earnings before interest, taxes, depreciation and amortisation, after leases, rose to 2.55 billion euros ($2.73 billion) in the January-September period. It did not provide quarterly earnings figures.

Free, Iliad's brand in France, racked up 324,000 new subscribers during the third quarter, which it called "a record sales performance". In Italy, the group gained 382,000 new subscribers, its best performance in three years.

"These very good results were achieved thanks to our choices in terms of investment and defending our subscribers' purchasing power," Iliad CEO Thomas Reynaud said in a statement.

Most European telecommunications operators have raised prices to limit the impact of inflation on costs.

Iliad, however, earlier this year set a five-year price cap on its two base plans, but was criticized for increasing the price of add-ons.

The unlisted group has in recent years expanded into Italy, becoming the country's fourth biggest telecom operator in terms of subscribers, and into Poland, where it has acquired two of the country's main mobile and internet providers.

Reynaud told reporters Iliad would seek to "participate actively" in any market consolidation in Italy.

Vodafone is examining possible options including a sale or joint venture for its Italian operations, two people familiar with the situation said, speaking on condition of anonymity. Iliad is among potential candidates for a deal, other sources with knowledge of the process said.

Iliad last year unsuccessfully bid for Vodafone's Italian business.

Asked about the planned sale of Italy's grid to U.S. private equity firm KKR, Reynaud said contracts granting Iliad access to the country's fibre optic network "must not be compromised".

($1 = 0.9348 euros)

(Reporting by Victor Goury-Laffont, Elvira Pollina and Amy-Jo Crowley Editing by Milla Nissi and Mark Potter)