2008: Further growth in a challenging environment

  • 5.42 million customers; contract customers account for more than 46% of the customer base 
  • Growth in revenues and EBITDA
  • Intensive growth of data services

Prague, 27 February 2009 - Trends in mobile business set in previous years - e.g. extreme penetration and strong competition between three global players, EU regulatory pressure, and rapid development of data services - influenced the development of the Czech telecommunications market in 2008.  Moreover, the global economy faced the first signs of recession, influencing many sectors. T-Mobile faced these challenges with honor, introducing a number of new services and achieving satisfactory results.

The fourth quarter of 2008 confirmed T-Mobile's leading position in the Czech market in terms of customer numbers and saw further growth of financial indicators. The total number of customers using T-Mobile services surpassed 5.4 million, which means an increase of 2.9% compared to the same period last year. The number of contract customers reached almost 2.5 million, i.e. more than 46% of the total customer base.

The Company's service revenues amounted to almost CZK 8 billion in Q4. Total revenues grew year-on-year by 2.0% to CZK 33.1 billion. EBITDA reached approximately CZK 15.8 billion and the EBITDA margin reached 47.7%. The ARPU indicator reached CZK 500.

"We are very proud of the achieved results, especially with regard to the challenges the market has been facing. We greatly value the loyalty of our customers and, of course, also the determination and enthusiasm of our employees," says Roland Mahler, Managing Director of T-Mobile Czech Republic, adding: "The business results are important but we also want to be regarded as a responsible company. We were recognized for this effort last year with the Best Employer Award. This gives us strong motivation to continue our efforts."

Customers: No. 1
In comparison with 2007, the number of T-Mobile customers increased by 2.9% to the current 5.42 million. T-Mobile further strengthened its position in the contract-customer segment. The number of contract customers reached nearly 2.5 million, representing more than 46% of the customer base. Customers using Twist prepaid services numbered 2.92 million at the end of last year. T-Mobile registered customer additions amounting to 151,000 for 2008.

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

Business customers that T-Mobile gained in 2008 included J&T Banka, a.s., Raiffeisenbank a.s., CCS Česká společnost pro platební karty s.r.o., Carrier Refrigeration Operation Czech Republic s.r.o., Danone a.s., Kimberly-Clark, s.r.o., Český telekomunikační úřad, Ústavní soud České Republiky or Jablonex Group a.s.

Financial Results: further growth
In 2008, the European Commission continued its regulatory effort, which has had a negative impact on the revenues of European operators. Moreover, the world economy was influenced by the first signs of the financial crisis. Despite that, T-Mobile achieved satisfactory financial results. Total revenues exceeded CZK 33.1 billion, ARPU revenues approached CZK 32 billion and the EBITDA (earnings before interest, tax, depreciation and amortization) indicator rose by 11% compared with 2007, to CZK 15.8 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: Communities, data, focus on retention
In 2008, T-Mobile further focused on the development of community and data services. The Company continued to increase the availability of fast data transmission - while the EDGE network currently covers almost 90% 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 30% year-on-year. T-Mobile also started offering the ADSL service and, at the end of the year, announced construction of a 3G network. This will enable T-Mobile to offer a full range of data services including various forms of mobile and fixed-line internet access.

T-Mobile continued to provide inspiring services in the field of social and personal networking, thus enhancing the networking role of mobile phones. In 2008, the operator introduced the special tariff plans T‑Mobile Rodina and T-Mobile Team (calls at favorable prices among five numbers), the BAV SE tariff plan with Mych5 (the cheapest monthly-fee tariff plan), and T-Mobile Combi (a prepaid card with all the benefits of a tariff plan); business customers were addressed by new tariff plans T-Mobile Profinet and Podnikatel.

For data users, T-Mobile Czech Republic introduced favorable data bundles (notebook + mobile data terminal + data tariff plan) and unlimited ADSL service. The "hit of the season" was the launch of the iPhone handset on August 23 together with a special data tariff plan for heavy data users.

T-Mobile continuously focuses on retention of its clients: it introduced the new T-Mobile Bonus loyalty program offering the same benefits both to prepaid and postpaid customers.

2009: Year of challenges
Even if the current financial crisis has a serious impact on various sectors, Roland Mahler is optimistic about the coming months: "We are not afraid of the future: telecommunications is a commodity which is being influenced by crisis far less than other segments. Our financial situation is healthy and stable, and we are able to react flexibly to the new situation. This is evident, for example, in the fact than we plan for 2009 the biggest investments in our network since 1998."

T-Mobile's strategy in 2009 includes further intensive development of data services, including DSL and the 3G network and favorable tariff plans with bonuses connected with their use. Another line of development could lead to new services such as mobile advertising and payment, identity management - NFC technologies and other value-added services.

According to Roland Mahler, building a long-term partnership with the customers is crucial: "We believe our future success depends on maintaining 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, supporter and consultant," says Roland Mahler.

  Q4 2008 2008 2007 change (%)
Number of customers ('000) 5,422 5,422 5,271 2.9
Contract 2,499 2,499 2,228 12.2
Twist (prepaid) 2,922 2,922 3,044 -4.0
Noví zákazníci ('000) 30 151 222 -32.0
Contracti  33 272 418 -34.9
Twist (prepaid) -2 -121 -196 38.3
Average monthly churn (%) 1.5 1.4 1.4 0.0 pp
Total revenue (CZK million) 8,330 33,140 32,482 2.0
ARPU revenue (million) 7,978 31,997 30,969 3.3
Adj. EBITDA (million) 3,625 15,811 14,249 11.0
Adj. EBITDA margin (total rev. %) 43.5 47.7 43.9 3.8 pp
Adj. EBITDA margin (ARPU rev. %) 45.4 49.4 46.0 3.4 pp
ARPU 492 500 501 -0.2
Non-Voice % of ARPU 22 22 20 2 pp

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.