An announcement which caused Proximus shares to plunge up to 10% during the session, around 5 euros/share, a level… seven times lower than its historic high, around 35 euros.
The arrival of Digi on the Belgian market was however already announced, and therefore anticipated in prices. “But the prices announced by Digi are even lower than expected, notes Patrick Casselman, equity analyst at BNP Paribas Fortis. Prices that the other three operators – Proximus, Telenet and Orange – cannot offer, given their cost structure. Especially since they have already launched more competitive price offers in anticipation of the arrival of Digi”.
Orange Belgium shares less affected
The blow is therefore hard, not only for the Proximus share but also for the share of the operator Orange Belgium, whose decline is however much more measured (-1.5% approximately), on Wednesday, than that of the operator Belgian history.
Digi reveals its prices: what does the operator offer for 5 euros per month?
It remains to be seen whether Digi’s floor prices can be sustainable over the long term? “This is clearly the launch price of the offer, believes Patrick Casselman, recalling: when Mobistar arrived, it offered prices 30% lower than those of Proximus. The goal is to reach a certain size in the market to be profitable. And then, perhaps, gradually increase its prices.”
But, in the meantime, the market clearly considers that Proximus’ position is weakened and that the operator therefore risks seeing customers flee and losing significant revenues at a time when investments to install optical fiber are particularly expensive…
