Iliad founder Xavier Niel © AFP

Iliad reported a double-digit rise in underlying profit during the first six months of the year as the French low-cost telecoms provider continued to rack up mobile and fixed-line subscribers.

The operator controlled by billionaire entrepreneur Xavier Niel said on Wednesday that earnings before interest, taxes, depreciation and amortisation (ebitda) to the end of June were €808.5m — 11.5 per cent higher than during the same period last year.

The group, whose Free mobile service sparked a price war in the French market after its launch in 2012, said that revenues during the period increased 6.3 per cent to €2.3bn thanks to double-digit revenue growth from its mobile service.

That was roughly in line with analysts’ forecasts and shares were up 1.7 per cent at €180 by mid-morning trading in Paris.

The group said it added 400,000 mobile subscribers during the period, taking the total number to more than 12m and giving it a market share of 17.4 per cent just four years after it began offering mobile services.

Iliad’s low-cost services have proved nothing short of a pain for France’s other three operators, forcing them to compete for market share via lower offers and having to cut operating costs as well as dividends to maintain profitability.

The groups have responded by trying to consolidate the market from four leading competitors to just three as part of efforts to end the price war. However, attempts by several operators to acquire Bouygues Telecom, the country’s third-biggest operator by subscribers, have so far failed.

Orange, the former state-owned operator and France’s largest by subscribers, was the most recent group to fail in its attempt to persuade Bouygues’s owner industrialist Martin Bouygues to sell his telecoms unit.

Against the continuing highly competitive environment, Iliad has expanded its ambitions abroad after it confirmed in July it had signed an agreement with Hutchison and VimpelCom to buy assets as part of the two groups’ plans to merge their Italian operations.

The planned acquisition of disposals would give Mr Niel’s Iliad the assets to start competing in the Italian market as the country’s fourth mobile operator.

Meanwhile, Iliad on Wednesday said that it would stick to its long-term target of reaching a 25 per cent market share in French mobile subscribers as it promised to increase slightly capital expenditure this year for building its 4G network.

It also said it aimed to achieve an ebitda margin of 40 per cent by the end of the decade after reporting a 1.6 percentage point margin increase in the first six months of the year, which took margins above the 35 per cent mark for the first time since it launched its mobile service.

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