By Mathieu Rosemain and Gwénaëlle Barzic
The company, founded in 1999 and controlled by billionaire Xavier Niel, is facing fierce competition in the area where it made its first successes - broadband.
Its total number of broadband subscribers fell for the first time in the company's history in the first three months of this year, dropping 19,000 from the previous quarter to 6.5 million.
Shares in Iliad, which competes in France with Orange, Bouygues and Altice, plunged as much as 17.6 percent to a five-year low of 136.30 euros, their steepest fall ever in single day.
"We haven't had good figures over the past year; I'm disappointed," Niel said in a call with analysts.
"We're changing everything in the company to immediately achieve good results on all our indicators."
Niel promoted finance boss Thomas Reynaud to become the new chief executive, replacing Maxime Lombardini in a reshuffle announced late on Monday.
Iliad pointed to heavy promotions by Altice's SFR, Orange and Bouygues in the French landline business to explain the weaker-than-expected results.
The broadband business has long been a profit engine for the group, helping to fund its low-price strategy in mobile.
2020 TARGETS CONFIRMED
Iliad's quarterly consolidated revenue missed analysts' expectations, edging up about 0.8 percent from a year earlier to around 1.2 billion euros ($1.4 billion). Sales at its landline business slid 1.6 percent.
In a call with analysts, Reynaud pledged to reinvigorate growth in the next 12 months with more aggressive offers in mobile and broadband and the launch in September of a new set-top box bundling voice, internet and TV services.
He also vowed to address France's business-to-business market in 2020.
"It is crucial that we reaffirm our identity as a maverick and keep our uniqueness," Reynaud added.
Iliad is also planning to launch in Italy, and the company said on Tuesday its debut there was pencilled in for June 21. That is later than the initial planned launch around the start of this year.
"A certain number of things may have dragged on," Niel said, citing both Italy and the new set-top box.
Capital expenditure (capex) for France will reach 1.55 billion euros for 2018, Iliad said, including costs related to the set-top box launch. The group had previously flagged capex of 1.4-1.5 billion euros.
Iliad confirmed its 2020 targets, including a consolidated earnings before interest, tax, depreciation an amortisation (EBITDA) margin of more than 40 percent in France. But the quarterly results left some analysts sceptical.
"Free cash flow generation looks increasingly challenging, given the competitive pressure in fixed, the lack of enough mobile ARPU (average revenue per user) uplift, and the high capex intensity, making it hard to achieve guidance...," Kepler Cheuvreux said in a note to clients.
(Editing by Keith Weir and Mark Potter)
By Mathieu Rosemain and GwÃ©naÃ«lle Barzic