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Orange Group, the telecoms operator backed by the French state, reported a small rise in revenues in the first three months of this year pulled down by lacklustre sales in its largest domestic market.

Orange said on Thursday that revenues were up 0.8 per cent in the first quarter to €10.1bn, while revenues in France dipped 0.1 per cent in the period to €4.4bn.

“The first quarter confirms the improvement in the 2016 trend,” said Stéphane Richard, chairman and CEO of the Orange, in a statement.

“Revenues are growing, driven by solid commercial performances, particularly in France, Spain and Poland.”

Orange’s sales and margins have come under pressure in France because of heavy promotions in the market since the arrival of low-cost operator Iliad’s Free mobile in 2012. As a result, groups like Orange and Altice’s SFR are trying to add more content to their telecoms packages to increase the average revenue per user and keep customers loyal.

Orange has said previously that Vivendi’s pay-TV unit Canal Plus wouldbe its preferred commercial partner but a deal is yet to emerge. Ramon

Fernandez, Orange’s chief financial officer, said on a call with journalists on Thursday that as long as these talks have not concluded, “what’s important is…a distribution and (content) aggregation policy, which allows us to offer our clients all the content they need.”

Orange said that fixed broadband services increased 6.3 per cent in the first quarter due to growth in fibre and TV content in France and Spain.

Mobile services were relatively stable at -0.2 per cent, hurt by the decreased revenues from national roaming in France and the decline in roaming prices in Europe.

The group increased capital expenditure in the first quarter by 2.1 per cent on a comparable basis to €1.5bn, which included investment in fibre and very high-speed mobile.

Orange is continuing a diversification push into financial services and will launch its Orange Bank next months for employees and in July for the general public. In Africa, its Orange Money mobile banking services reached 30m customers this quarter.

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