PARIS (AP) — Telecoms and media conglomerate Vivendi SA warned Thursday that its earnings will suffer this year and next after the entry of a fourth mobile telephone operator into the French market.
Paris-based Vivendi, which owns the Universal Music Group as well as film studio Canal Plus, warned in a statement that heightened competition from Free, a French internet service provider which received a mobile phone license last year, "will place increased pressure on Vivendi's results in 2012 and 2013."
The profit warning shocked investors, who bid down Vivendi shares nearly 10 percent in early trading on the Paris stock exchange. At 1430 GMT Vivendi shares were down 7.8 percent at euro14.86.
Vivendi's warning came as it reported 2011 net profit up 22 percent to euro2.68 billion ($3.6 billion).
Vivendi owns SFR, France's number two mobile phone operator with a total subscriber base of 21.5 million. Vivendi said it would "reconsider very carefully" SFR's commercial offer and its cost base in response to the emergence of a fourth mobile operator in France.
The company said it does not expect to return to profit growth before 2014, when benefits from past acquisitions and further development in emerging countries like Morocco and Brazil should start flowing through.
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