Bouygues Telecom Says Rising Sales and Savings to Boost Profit

Bouygues SA, the media and construction group that rejected an $11 billion offer for its telecommunications unit, said rebounding sales and increased costs cuts will lift margins at its mobile-phone business by 2017.

Bouygues Telecom is targeting more than 10 percent sales-from-network growth by 2017, Paris-based Bouygues said in a statement Tuesday. It repeated a margin target of 25 percent, rising to 35 percent over the “longer term.”

The media, construction and telephony group is looking to build investor confidence around its go-it-alone strategy, after rebuffing an offer from Altice in June as a mobile-phone price war in France rages on. It raised a 2016 savings target by 100 million euros to 400 million euros, while investing about 750 million euros a year to help compete for the No. 3 market position with Iliad SA.

Bouygues’ network-sharing agreement with Numericable-SFR will generate annual savings of about 100 million euros on operating costs and capital expenditure from 2018. It also plans to add 1 million mobile customers in the three years by attracting subscribers who need a quality network for watching videos and playing games, and 1 million of Internet subscribers by then with a discount offer.

In August, Bouygues Telecom raised its target for 2015 earnings before interest, taxes, depreciation and amortization to about 750 million euros, compared with 694 million euros in 2014. It previously expected Bouygues Telecom’s profits to be stable this year.

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