Bouygues has become the latest French company to report a drop in profits because of a mobile phone price war in the country, though it said 2012 would probably be the low point.

The group, which owns construction, television and telecoms assets, said net profit for 2012 fell 41 per cent compared with the year before to €633 million because of the problems in its phone business.

Its bigger French rivals, Vivendi and France Telecom, have also reported falling profits because of the launch of an ultra-low cost mobile operator by Iliad, a company owned by billionaire investor Xavier Niel.

Bouygues shares rose over 13 per cent in Paris after it said its telecoms arm’s earnings before interest, tax, depreciation and amortisation after investment were expected to increase from this year. – (Copyright The Financial Times Limited 2013)