Bouygues: Bouygues Tel's offensive met with cool reception

(CercleFinance.com) - Bouygues shares were the second biggest loser in the CAC 40 index on the Paris Bourse on Thursday, the day after its subsidiary Bouygues Telecom launched an offensive to conquer the consumer market.


By noon, the French industrial conglomerate's share price was down almost 4%, the second worst performer on the CAC 40, down 0.7%, just behind Stellantis (-4.2%).

Bouygues Telecom announced last night its intention to launch a new brand called 'B.IG' brand, as well as an offer aimed at families.

In its press release, the operator describes the consumer mobile market as 'in a state of flux', due to slowing volume growth and recently heightened competitive tension.

The connectivity services provider also points to the context of inflation and pressure on household purchasing power, which are forcing them to make 'arbitrages' in order to optimize their bills.

According to calculations made by Stifel analysts, the 'B.IG' brand could enable a two-person household to save ten euros on their box subscription per month, and eight euros each on their mobile line.

'We believe this announcement confirms the return of a strategy focused on gaining market share under the impetus of tariffs, with priority given to growth to the detriment of margins', stresses the research consultancy.

Following Bouygues Telecom's announcement, the Orange share - which has so far not yielded to the temptation to deploy a strategy based on volume growth - lost almost 3% on Thursday.

Despite its new roadmap, Bouygues Telecom confirmed its 2024 objectives and its FCF before WCR target of around 600 million euros 2026 presented at its 2021 investor day.

On the other hand, Bouygues Telecom now anticipates only "modest" growth in service sales and Ebitda 'AaL' by 2026 compared with 2023, and lower than the forecasts presented in 2021, a prospect which caused the share price to fall on Thursday.


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