Bouygues Group on Thursday lowered its full-year revenue outlook as its telecom arm weighed on first-half earnings.

The French conglomerate expects sales in 2014 to decline by between 1% and 2% compared to 2013, whereas previously it forecast sales to be broadly flat.

The adjustment was made at the same time that Bouygues announced that current operating profit in the six months to June declined to €134 million from €347 million a year earlier, driven by falling earnings at Bouygues Telecom.

Indeed, its telco arm swung to a €41 million current operating loss from a €91 million profit in 1H 2013. Revenue fell 5% to €2.2 billion.

"As expected, first-half financial results [at Bouygues Telecom] were affected by ongoing repricing within the mobile customer base," said Bouygues, in a statement.

A fierce price war brought about by Free's entry to the French mobile market has hit Bouygues Telecom's margins and pushed the sector towards consolidation.

In a bid to remain independent, Bouygues Telecom in June unveiled a transformation plan that will see it focus on three areas: 4G mobile broadband; aggressively-priced fixed broadband and telephony; and customer service.

However, the restructuring – which will result in 1,516 job losses – was widely-believed to have been brought about by Bouygues' failure to broker a merger with either Orange or Iliad.

"Bouygues Telecom is successfully rolling out its aggressive strategy," said Martin Bouygues, chairman and CEO of Bouygues Group, in a statement on Thursday.

In the first half, Bouygues Telecom added 74,000 contract mobile customers, giving it a total of 10 million. However, this was offset by a loss of 193,000 prepay customers, leaving the company with an overall mobile customer base of 11 million, down from 11.1 million at the end of 2013.

On the fixed side, Bouygues netted 202,000 customers, giving it a total of 2.2 million.