Year 2010: New services, new challenges

  • Almost 5.5 million customers; nearly 51% of them are contract customers
  • Expansion in data services, both fixed and mobile

Prague, 25 February 2011 – In 2010 a number of challenges – e.g. the fading impact of economic recession, added EU regulatory pressure and strong competition in the Czech market – hindered the creation of favourable conditions for further growth. Nevertheless, T-Mobile maintained its leading position in the mobile segment, strengthened its fixed telephony offer and, besides other new services, introduced T-Mobile TV. Moreover, the Company invested heavily in 2G network modernization and 3G network roll-out. 

As of 31 December 2010, the total number of customers using T-Mobile services remained stable at nearly 5.5 million; the number of contract customers approached 2.8 million. Total revenues decreased year-on-year by 7.1% to just under CZK 29.3 billion. Adjusted EBITDA rose to approximately CZK 13.9 billion and the adjusted EBITDA margin reached 47.7%. The ARPU indicator reached CZK 417. 

“The business environment has been highly challenging in the past few years; this is all the more reason why we can be satisfied with the achieved results. We managed not only to maintain stable customer and financial indicators but also to step out successfully into new areas," says Milan Vašina, Managing Director at T‑Mobile Czech Republic. 

Customers: Focus on current customersand loyalty
In comparison with 2009, the number of T-Mobile customers increased by 0.2% to the current 5.5 million. T-Mobile further strengthened its position in the contract customer segment. The number of contract customers reached nearly 2.8 million, representing almost 51% of the customer base. Customers using Twist prepaid services numbered nearly 2.7 million at the end of last year. T-Mobile registered customer additions amounting to 19,000 in 2010. Monthly churn rate (i.e., the share of customers who decided to stop using the operator's services) decreased to 1.3%. 

Business clients which T-Mobile gained in 2010 included MAKRO, Media Group MAFRA, AAA Auto, OVB Allfinanz, TRW Automotive, Strabag or Mediatel.  

Financial Results
T-Mobile achieved satisfactory financial results, despite the fading negative impact of the global financial crisis and continuing European Commission regulatory pressure. The Company recorded total revenues in the amount of CZK 29.2 billion; Service revenues reached CZK 27.3 billion. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) reached CZK 13.9 billion and the adjusted EBITDA margin amounted to 47.7%. ARPU (average revenue per user) had decreased by 10.1% year-on-year to CZK 417 by the end of December 2010. This development was influenced mainly by the launch of new tariff-plan generations, ongoing transfers to prepaid services and the impacts of regulation. Revenue from non-voice services increased to 24% of ARPU. 

Services: New business areas, huge investments
The year 2010 was marked by the intensive 3G network roll-out; at the end of December, T-Mobile’s 3G network covered 39 cities in the Czech Republic. T-Mobile TV, a new satellite television service introduced in November, illustrated the Company’s intention to find new business areas and its willingness to offer multimedia services to customers. 

The Company also introduced a number of innovative services and products such as the unlimited GRAND and Profi tariff plans, a new generation of Přátelské (friendly) tariffs and the unique PC-game rental service FRAG. The Company’s focus on data services was reflected in the introduction of very successful voice-data bundles, a 24-hour mobile data tariff plan, the reduction of the price of the ADSL service to CZK 399 and in the offer of the Compaq all-in-one PC. 

Moreover, T-Mobile successfully tested the Near Field Communication (NFC) technology, which opens the way to future usage of identification and m-payment services.  

2011: New horizons
T-Mobile’s new managing director, Milan Vašina, who assumed the office on 1 January 2011, is optimistic about the future: “I’m personally looking forward to the coming months, as there are many interesting challenges in front of us. T-Mobile has covered a great deal of the way to becoming the best-performing integrated operator in the Czech market, but there is still a long journey ahead of us. But with the people we have, I’m not worried about it.” 

In 2011, T-Mobile intends to further invest in data services, especially in mobile broadband. The 3G roll-out will continue with the very same intensity as in the previous year. Moreover, thanks to the recently concluded network sharing contract with TO2, the Company will be able to offer 3G services to a much larger number of customers than originally planned. T-Mobile’s strategy in 2011 includes not only further development of offered services and products and introduction of new ones. The Company also wants to focus more on the customers’ experience with the brand, which is crucial for the customers’ satisfaction and thus for maintaining a stable position in the highly saturated Czech market.

‘000 Q4 2010 Q4 2009 % y. o. y. Q1–4 2010 Q1–4 2009 % y. o. y.
Customers – mobile 5,475 5,464 0.2% 5,475 5,464 0.2%
Contract 2,778 2,660 4.4% 2,778 2,660 4.4%
Prepaid 2,696 2,925 -3.9% 2,696 2,804 -3.9%
Net adds – mobile 15 6 NA 19 43 -55.8%
Contract 28 30 -6.7% 126 161 -21.7%
Prepaid -14 -24 41.7% -108 -119 9.2%
Average monthly churn – mobile 1.4 % 1.5% -0.1 p. p. 1.3% 1.4% -0.1 p. p.
Contract 0.5 % 0.5% 0.0 p. p. 0.5% 0.5% 0.0 p. p.
CZK Q4 2010 Q4 2009 % y. o. y. Q1–4 2010 Q1–4 2009 % y. o. y.
Total revenues (million) – integrated 7,197 7,585 -5.1% 29,246 31,472 -7.1%
Services revenues (million) – mobile 6,663 7,188 -7.3% 27,316 30,196 -9.5%
Adj. EBITDA – integrated 3,303 3,648 -9.5% 13,937 16,219 -14.1%
EBITDA margin (total rev.) 45.9% 48.1% -2.2 p. p 47.7% 51.5% -3.8 p. p
ARPU – mobile 407 440 -7.5% 417 464 -10.1%
Non-voice % of ARPU mobile 24% 23% 1 p. p. 24% 23% 1 p. p.

Note: NM = not meaningful

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About the Company

T-Mobile Czech Republic, a member of the international telecommunications group Deutsche Telekom, has almost 6.2 million customers, the number-one operator in the Czech market. T-Mobile is an integrated operator: in addition to telecommunications services, it offers comprehensive ICT solutions not only for companies, but also for other organizations and individuals. It provides outstanding services in the high-speed network, which was proved repeatedly by benchmark testing performed by umlaut (former P3) with Best-in-Test seal.

T-Mobile Czech Republic places emphasis on taking a responsible approach to the environment and society. It adheres to fair business practices, helps beneficial applications and services to see the light of day, supports non-profit organizations, small businesses and individuals, and lends a helping hand whenever crisis situations arise. The company’s employees serve as volunteers in many places across the entire Czech Republic.

More information about the company is available at www.t-mobile.cz, www.t-press.cz (the portal for journalists) and www.t-mobile.cz/pomahame (information on the company’s CSR activities).

Contact details of the press unit: press@t-press.cz.