(Bloomberg) -- Orange SA’s revenue recovery in its home market of France, the telecommunications company’s biggest, was dampened by broadband customer defections in the first quarter.

Sales in France rose about 0.8% to €4.34 billion ($4.6 billion) in the first quarter compared to a year earlier, the company said in a statement on Wednesday. That compared to the approximately €4.3 billion analysts had forecast, according to the average of a Bloomberg survey.

Orange had increased prices in the market and cut the length of promotions, boosting revenue. Still, the company lost 43,000 fixed broadband customers in France during the quarter, which it attributed to a market slowdown that started at the beginning of last year. The company may be having trouble raising prices in the heavily competitive country, Goldman Sachs analyst Andrew Lee said in a note to investors. 

“Unlike many of its peers, Orange’s retail operations did not see revenue growth acceleration despite the inflationary macro price environment,” Lee said. “We argue this reflects a lack of pricing power given the below average market structure in France – with multiple overlapping networks.”

Orange shares fell 3.3% to €10.68 in Paris trading at 2:06 p.m. on Wednesday. The stock has gained 3.6% this year. 

Orange France’s Chief Executive Officer Jean-François Fallacher tried to reassure investors on Wednesday and said that broadband customer turnover was slowing and competitors such as Iliad SA, the no-frills mobile operator that competes on price, wasn’t having an impact. 

Orange’s overall revenue  grew 2.1% in the first quarter from a year earlier, driven by gains in Africa and the Middle East and a recovery in its largest French unit. Revenue rose to €9.85 billion compared to the €9.77 billion analysts had forecast, according to the average of a Bloomberg survey. Earnings before interest, taxes, depreciation and amortization after leases rose to €2.41 billion.

Orange is seeking to consolidate its position in European markets, where competition has undercut its earnings. In February, the European Commission approved Orange’s €18.6 billion joint venture with Masmovil Ibercom SA in Spain. Orange Chief Executive Officer Christel Heydemann said this was a “major step” toward her plan in shaping the company’s future.

Read More: Orange Wins Conditional EU Nod for $20 Billion Masmovil Deal 

Heydemann said Wednesday that the market in Spain is changing dramatically — with Orange’s Masmovil deal and Vodafone Group Plc selling its Spanish business to Zegona. The joint venture with Masmovil should allow Orange to tap into a broader customer base across Spain’s growing low-cost market. 

“We do expect the market to improve,” Heydemann said, “At least, we will drive our path in making sure we drive value in this market.”

The company also proposed increasing its dividend payable in 2025 to 75 cents per share, including an interim 30 cent dividend this December. 

--With assistance from Charlotte Hughes-Morgan and Henry Ren.

(Updates with additional context on the French unit performance throughout. A previous version corrected the analyst revenue consensus forecast in first and second paragraphs and Ebitdaal gain.)

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