UPDATE 1-Sacrificing margin, Altice Europe chases market share in France

* Q2 core operating profit down 9.1 pct

* Adds customers in France, Portugal

* Revenue and margin to decrease in 2018-CEO (Adds details, background, CEO quote)

PARIS, Aug 2 (Reuters) - Altice Europe, billionaire Patrick Drahi's debt-ridden telecoms and cable group, went on with aggressive promotions in France in the second quarter, choosing to sacrifice margins in a bid to gain customers.

The Amsterdam-listed company is striving to recover the confidence of the markets after disappointing commercial performances in France, its biggest market, severely hit its shares last year, prompting a management and strategy reshuffle.

Previously known for its ruthless cost management, the group has shifted gears to focus on gaining market share, improving its services and reducing its 32 billion-euro pile of debt.

Altice Europe's number of broadband subscribers grew for the second quarter in a row in France, with 13,000 net additions over the period, it said on Thursday.

It also added 211,000 mobile subscribers in the country, driven by new commercial offers that started in March.

Group quarterly core operating profit tumbled by 9.1 percent from a year ago to about 1.32 billion euros ($1.54 billion).

Revenues, roughly in line with market expectations, were down by 3.8 percent to 3.48 billion euros. The margin stood at 37.8 percent, down from 40.1 percent a year ago.

Altice Europe also added customers in Portugal, where it owns the biggest telecoms operator.


"To increase revenue we need first to recruit the customers we lost year," Altice Europe Chief Executive Officer Alain Weill told reporters during a call.

Weill said he expected revenue and margins to fall in 2018, with sales picking up in 2019.

Since Drahi took control of SFR, Frances second-biggest telecom operator, it has lost more than 1.6 million mobile customers and over half a million fixed broadband customers.

This has raised concerns among investors about Drahi's ability to pay up debt in a rising interest rate environment and has led to the separation of his U.S. cable activities, folded under Altice USA, from Altice Europe.

SFR's aggressive promotions are now turning the investors' attention to French rival Iliad, whose situation is now seen as being weakened by the defection of mobile customers.

Iliad, founded by billionaire Xavier Niel, said late on Wednesday that it had lost customers in some parts of its business but won over others elsewhere.

Altice Europe confirmed its full-year targets, including an operating free cash flow in the range of 2.3 billion and 2.5 billion euros.

The operating free cash flow generated by its French division should be in the low end of 1.5-1.6 billion-euro guidance it gave earlier this year.

($1 = 0.8585 euros) (Reporting by Mathieu Rosemain and Gwenaelle Barzic; Editing by Sudip Kar-Gupta)