Iliad gears up for entry into Europe's top five in 2024

France's former enfant terrible Iliad has passed through the awkward adolescent phase and is now convinced it will be able to join the European top five telco club before the end of 2024.

As proclaimed in prepared remarks by Iliad CEO Thomas Reynaud, the group is "radically changing scale" from a technological and geographical perspective.

"Having become Tele2's reference shareholder, we are now present in eight European countries. Forming part of Europe's top five telcos is within our reach, and as from this year," Reynaud said.

These eight markets include Iliad's primary three operations in France, Italy and Poland, as well as Ireland, where it owns former incumbent eir along with NJJ Holding, Iliad founder Xavier Niel's private investment vehicle, and the four Tele2 markets of Sweden, Lithuania, Latvia and Estonia.

Meanwhile, Niel's NJJ venture also has a 2.5% stake in Vodafone Group and has recently signalled interest in entering Ukraine as well as buying more shares in Millicom, which provides telecom services in Latin America through its Tigo brand. In addition, NJJ has invested in telecoms operators in Cyprus, Liechtenstein, Malta, Monaco and Switzerland. 

Heading for the €10 billion mark

During Thursday's earnings call for the first quarter of 2024 (Q1 FY24), Reynaud said a second major objective for 2024 is to reach the €10 billion (US$10.8 billion) revenue threshold for the first time, including France, Italy and Poland. The group reported consolidated revenue of €9.24 billion ($10 billion) in FY23, up 10.4% on the prior year.

He added: "Clearly, we want to continue to expand our horizon, both from a technological and a geographic perspective. From a technology standpoint, we invest and we will continue to invest in the development of our private and public cloud services, our cyber security solutions, and we will make some announcements in June, and also our computing capabilities." 

For instance, Scaleway, Iliad's cloud services subsidiary, announced last week that it has expanded its private server offering to cover 65 cities in 52 countries across six continents. The operator has also previously outlined plans to become an AI champion and build up an AI ecosystem in France.

Furthermore, Iliad announced on Thursday that it plans to invest €2.5 billion ($2.7 billion) in data centers over the next decade in order to exploit the growing demand for AI-led developments. Reynaud said Iliad now has 15 data centers spread across Paris, Marseille and Warsaw.

Northward bound

The acquisition of the Tele2 stake represents Iliad's next expansion opportunity from a geographical perspective. Reynaud described as "an important milestone" the recent decision of Tele2's AGM to elect him as chairman of its board of directors. Aude Durande, Iliad's deputy CEO, and Jean Marc Harion, CEO of Iliad's Play group in Poland, have also been elected as Tele2 board members.

"We have started engaging with Tele2 executives to establish a roadmap of cooperation, and there is a strong appetite on both sides in order to share best practices, industrial knowledge, and in particular in terms of innovation, convergence and investment in next generation network and also data center driven cloud. So a big program, a very important roadmap, and the name of the game is cooperation," Reynaud said.

In Q1 FY24, Iliad reported an 11.2% rise in consolidated revenue, to €2.43 billion ($2.63 billion), noting that France recorded its strongest quarterly revenue growth for nearly ten years, with revenue up 10%. Revenue in Poland increased by 13.8%, while Italy saw a 12.8% increase. Consolidated EBITDAaL rose 12.2%, to €878 million ($951 million).

"We are the fastest growing operator in Europe," Reynaud declared. "This means that we are within touching distance of our goal to become the number five European telecom operator, which is an important target for the full team."