2007: Excellent results in highly saturated market

  • Further growth in revenues, EBITDA and ARPU
  • Leadership in ARPU revenues in Q4
  • The mark of 2 million contract customers surpassed, more than 42% of customer base are post-paid customers

Prague, 28 February 2008 - The Czech mobile market in 2007 was notable due to mobile-phone saturation above 126 %, three global players, demanding customers, significant growth of data services, and the European Commission regulatory pressure in the roaming area. T-Mobile handled all this with honor: the Company introduced a number of new services, achieved a positive balance in number porting, and its results were more than satisfactory.

The fourth quarter of 2007 confirmed T-Mobile's leading position in the Czech market in terms of customer numbers and saw further growth of financial indicators. For the first time, the Company surpassed its biggest competitor in mobile-segment service revenues, which amounted to CZK 8.2 billion in Q4. Total revenues grew year-on-year by 9.9 % to nearly CZK 32.5 billion. EBITDA reached approximately CZK 14.25 billion and the EBITDA margin reached an excellent 43.9 %. The ARPU indicator also increased, by nearly 2 %, to CZK 501.

The total number of customers using T-Mobile services reached almost 5.3 million, which means an increase of 4.4 % compared to the same period last year. The mark of 2.2 million contract customers was surpassed; they accounted for more than 42 % of the total customer base.

"We highly value our success, especially the fact we maintained our leading position in customer numbers and proved we are able to become No. 1 even in financial indicators," says Roland Mahler, Managing Director of T-Mobile Czech Republic, adding: "It gives us strong motivation for further development. We believe the way towards further value growth must be based on further increasing the quality of our products and customer care, and on monitoring the needs of the different customer segments. This is the only way to gain the long-term confidence and loyalty of our customers. And these qualities will be among the key factors for successful performance in future."

Customers: More than 2.2 million contract customers, significant achievements in business segment
In comparison with 2006, the number of T-Mobile customers increased by 4.4 % to the current 5.271 million. T-Mobile further strengthened its position in the contract customer segment. The number of contract customers reached 2.2 million, representing more than 42.2 % of the customer base. Customers using Twist prepaid services numbered 3.04 million at the end of last year.

Monthly churn (i.e., the number of customers who decided to stop using the operator's services) remained stable at 1.4 %.

T-Mobile registered customer additions amounting to 222,000 for 2007. "The residential market saturation has reached its limits and the organic growth of the customer base has significantly slowed down," says Roland Mahler, commenting on the development, and adding: "Wanting to grow in the future, we have to focus on the development of our current customers and value-added services." 

T-Mobile repeated its positive statistics with regard to mobile portability. In 2007, as in the previous year, more customers ported their numbers to the T-Mobile network than those that switched to a different operator. Overall, the operator gained 11,070 new customers. 

Business customers that T-Mobile gained in 2007 included Pražská energetika, American Express, RAVAK, SCHENKER, HENKEL ČR, the Moravia-Silesia and South Moravia regions, CANON CZ, Veletrhy Brno, Police of the Czech Republic, Central Bohemia Regional Administration, ZETOR TRACTORS, Dalkia and Ministry of Foreign Affairs.

Financial Results: Breakthrough in ARPU (service) revenues, further growth
2007 presented a breakthrough: T-Mobile won the No. 1 position in Q4 service revenues, which reached CZK 8.2 billion.

In 2007, total revenues exceeded CZK 32.4 billion, ARPU revenues approached CZK 31 billion and the important EBITDA (earnings before interest, tax, depreciation and amortization) indicator rose by 11.8% compared with 2006, to CZK 14.2 billion. The achieved figures reflect both the expansion of the customer base as well as the more intensive use of mobile services and T-Mobile's maximum effort to further enhance its operational excellence.

Services: Focus on data and social and communities related services
In 2007, T-Mobile continued its strategy focused on the development of non-voice and value-added services that are beginning to play an increasingly significant role. The Company continued to increase the availability of fast data transmission - while the EDGE network currently covers more than 86 % of the population, the Internet 4G services, which are considered capable of providing the fastest wireless access to the internet, are now  available to more than 60 % of the Czech population.

The volume of transmitted data increased by 100 % year-on-year, while the proportion of Internet 4G services is 75 % of the total volume. At the end of the year, T-Mobile started ADSL pilot operation; the commercial launch was in January 2008. This enables T-Mobile to offer a full range of data services including fully mobile and fixed-line internet access.

T-Mobile continued to provide inspiring services in the field of social and personal networking enhancing the networking role of mobile phones. In 2007, the operator introduced the special tariffs Girls Talk (free calls after the third minute) and Mých5 (cheaper rates to five favorite numbers). The t-music PLAY! service and stage.cz portal for amateur musicians are examples of the social networking services which are now becoming increasingly popular.

In the field of standard tariff plans, T-Mobile introduced credit plans enabling the unlimited rollover of free units, and added three new Twist plans (Twist Start, ProSMS and Týden) to its portfolio of pre-paid services.

Last year could be called the year of EU regulation. T-Mobile met the requirements of lower prices of roaming calls and was the first operator in the Czech Republic to introduce the EU roaming add-on on August 1, earlier than the European regulation had required.

"We believe our future success depends on maintaining a long-term partnership with our customers, on mutual loyalty. Our role is to help people stay connected with those closest to them, to save them time, help them to enjoy their lives, and to be their reliable partner and supporter," says Roland Mahler.

T-Mobile's strategy in 2008 includes further intensive development of data services and focus on value added services.

  4Q 2007 2007 2006 Change y/y (%)
Number of customers ( ?000) 5,271 5,271  5,049 4.4
Contract customers 2,228 2,228 1,809 23.1
Twist customers 3,044 3,044 3,240 (6.0)
New customers (?000) 64 222 415  (46.3)
Contract customers 95 418 522 (19.8)
Twist customers -32 -196 -106 (83.2)
Total revenues (CZK mil.) 8,731 32,482 29,548 9.9
ARPU revenues incl. visitors 8,204 30,969 28,075 10.3
EBITDA (CZK mil.) 3,320 14,249 12,746 11.8
EBITDA margin (total revenues) 38.0 43.8 43.1 0.7p
EBITDA margin (ARPU revenues) 40.5 46.0 45.4 0.6p
ARPU incl. visitors (CZK) 522 501 492 1.9
Share of non-voice services in ARPU 22.0 20.0 21.0 (1p)

About the Company

T-Mobile Czech Republic, a member of the international telecommunications group Deutsche Telekom, is with its almost 6.2 million customers the number-one operator in the Czech market. T-Mobile is an integrated operator: in addition to converged telecommunications services, it offers TV and comprehensive ICT solutions. 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), www.t-mobile.cz/pomahame (information on the company’s CSR activities) and www.rozjezdy.cz (T-Mobile Takeoffs of the Year – a program to support small businesses).

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