Iliad’s success proves telecom is viable

• Some telcos argue it isn’t possible to sustain a healthy business without regulatory change
• Iliad Group is proving there is growth to be had and money to be made in the telecom services sector
• The European operator grew its customer base, revenues and earnings in 2024

Is telecom a viable business these days? Some operators argue that regulatory shackles and unfair competition are stifling their business opportunities and innovation potential, and that lawmakers need to cut them a break – that pitch was made again at the recent MWC25 event by the CEOs of Deutsche Telekom, Orange, Telefónica and Vodafone. Meanwhile, the Iliad Group’s 2024 financial report suggests that sales and earnings growth is possible, even in the most highly competitive markets in Europe.  

Iliad has just reported full year group revenues of just over €10bn, up by 8.5% compared with 2023, earnings before interest, taxes, depreciation and amortisation (EBITDA) of €3.85bn, up 11.8%, and operating free cash flow of €1.83bn, up 28% (it has a target of €2bn for 2025). Net profit for 2024 was €367m, up 15.5%. 

The operator ended last year with 50.52 million customers across its three main markets of France, Italy and Poland, of which nearly 40.5 million are mobile users and just over 10 million fixed line (including broadband) customers. 

According to Iliad, this makes it Europe’s fifth-largest telco, while its CEO also likes to bundle in the customer numbers from Ireland national operator Eir (in which Iliad and its owner Xavier Niel hold a majority stake) and Sweden’s Tele2 (in which Iliad holds a controlling stake) to take the total number even higher when outlining the company’s progress.   

“We’re achieving all the targets we’ve set ourselves: We’re now one of Europe’s top-five telcos, with a presence in eight countries and more than 60 million subscribers,” stated Iliad Group CEO Thomas Reynaud. “Every step of our journey has been guided by innovation – from the first Freebox we launched in 2002 through to the AI infrastructure we’re building in 2025. The landscape of the telecoms and digital sector is being radically reshaped and the Iliad Group has multiple strengths to help drive this transformation, led by the same deep-rooted aspirations of entrepreneurship and growth that we’ve had from the very outset,” he added. 

That might sound like bluster, but Iliad has proven its critics wrong for more than 20 years already and has long married technical innovation with aggressive marketing (positioning itself as the upstart challenger) to attract and, importantly, retain customers. When it began as a fixed broadband service provider in France at the beginning of this century, founder Xavier Niel didn’t like the technology on offer from the telecom vendor sector so his company designed and manufactured their own broadband network equipment, with great success. 

Now Niel has spied an opportunity for Iliad and his broader technology empire in AI, with Iliad stating today, not for the first time, that it intends to be a “market leader in AI in Europe”. The company is investing €3bn in “AI-dedicated infrastructure”, most of which (€2.5bn) is being pumped into OpCore, which runs Iliad’s datacentres and has forged a partnership with European private equity firm InfraVia. 

In addition, Iliad’s enterprise cloud services unit Scaleway has “invested in the largest AI compute capacity available in the commercial market in Europe… [with] almost 5,000 top-tier GPUs [graphics processing units] offered to companies for them to train and use their models.” Iliad has also invested €100m in Kyutai, a nonprofit open-science AI research lab. In addition, Free, Iliad’s service provider business in France, has teamed up with Mistral AI to become the first telco in the country to “offer all of its mobile subscribers [15.5 million] an AI assistant, with an exclusive 12-month, free-of-charge offer for Le Chat Pro – the new premium version of the AI assistant developed by Mistral AI.”

Reynaud noted in February: “For several years now at the Iliad Group, we’ve believed in the power of artificial intelligence, which is why we decided to devote the necessary resources to it. We’re investing €3bn across the entire value chain – from datacentres to computing power and open-science research, and we’re democratising AI through our partnership with Mistral. The reason we’ve taken so many initiatives over the past three years is because we know that it’s a decisive time, when our society’s future is being played out.”

If the past 20 years are anything to go by, Niel and his team at Iliad won’t be stopping there and will continue to grow the business and make money. Maybe it has a model from which other telcos might learn. 

- Ray Le Maistre, Editorial Director, TelecomTV