Q3 2010: Stable results prove set strategy

  • Contract customers accounted for over 50% of all 5.5 million customers
  • Total revenues exceeded CZK 22.0 billion
  • ARPU blended reached CZK 421  

Prague, 4 November 2010 – In the first nine months of 2010, T-Mobile Czech Republic achieved satisfactory results despite negative impacts of ongoing trends in the telecommunications market – namely full mobile penetration, strong competition and EU regulatory measures. The operator stabilized its customer base and recorded a decrease in key financial indicators.  

The total number of mobile customers who were using T-Mobile services as of 30 September 2010 stayed at almost 5.5 million. Total revenues exceeded CZK 22 billion in the first nine months of the year, of which nearly CZK 7.4 billion was generated in the third quarter of this year. EBITDA (integrated) reached approximately CZK 10.6 billion, and the EBITDA margin reached 48.2%. The average revenue per mobile user (ARPU) amounted to CZK 421 both in Q3 2009 and in the first nine months of this year.  

“The reported results affirm our strategy. It´s clear the mobile market is fully penetrated and due to several factors, including external economic and regulatory pressures, is starting to decline. Therefore we are also focusing on other business areas such as fixed, ICT and TV markets," explains Roland Mahler, Managing Director of T-Mobile Czech Republic, adding: “This strategy will help us to fulfil our main aims - to keep stable revenues and remain the fastest growing integrated operator." 

During the first nine months of this year, the company continued to develop its data services – its 3G network thus now covers more than 34% of the population and the roll-out continues. Numerous data propositions were also introduced: e.g. the “24 for 24" daily pass, ADSL starting at CZK 399 and mobile internet for young customers for CZK 100. Moreover, T-Mobile launched innovative tariff plans both for post- and pre-paid customers and FRAG, the unique rental of online computer games. (For more information on the offers mentioned above, please see www.en.t-press.cz.)  

Financial results
In the first three quarters of 2010, T-Mobile Czech Republic reported total revenues of CZK 22.0 billion, which represents a year-on-year decrease of 7.7%. Service revenues totalled nearly CZK 20.7 billion. The adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) reached CZK 10.6 billion, the EBITDA margin amounted to 48.2%. ARPU (average revenue per mobile user) decreased by 10.8% year-on-year to CZK 421 as of the end of September 2010 which is mainly the result of regulatory impacts. Those negative effects could only partly be compensated by the increased share of contract customers of the total customer base generated though launches of new, more advantageous tariff plan generations. Non-voice revenues increased to 23% of ARPU revenues in the first nine months of this year.

Customers
The total number of customers remained at the same level of 5.46 million. The number of contract customers reached almost 2.75 million, which accounted for more than half of the total customer base and represented a year-on-year increase of 4.6%. In the first nine months of 2010, the average monthly churn (i.e. the number of customers who decided to stop using an operator's services) remained stable at 1.3%.  

“The stability of our customer base is unique and we´d like to strengthen it by introducing other advantageous tariff plans and offers. We believe our Christmas campaign including the brand new 'sharp' T-Mobile TV will assure customers that they´ve chosen the right operator," concludes Mahler.

Q3 2010 results

'000 Q3/10 Q3/09  

% y.o.y. (rounded)

Q1-3/10 Q1-3/09  

% y.o.y. (rounded)

Customers (end of period) 5,460 5,458 0.0% 5,460 5,458 0.0%
 - Contract 2,750 2,630 4.6% 2,750 2,630 4.6%
 - Prepay 2,710 2,828 -4.2% 2,710 2,828 -4.2%
Net adds -5 25 n.m. 4 36 -88.9%
 - Contract 20 32 -37.5% 98 131 -25.2%
- Prepay -24 -6 n.m. -94 -95 -1.1%
Average monthly churn 1.4% 1.3% 0.1%p 1.3% 1.3% 0.0%p
 - Contract 0.5% 0.5% 0.0%p 0.4% 0.5% 0.0%p
CZK Q3/10 Q3/09 % y.o.y. Q1-3/10 Q1-3/09 % y.o.y.
CeTotal revenues (million) 7,380 8,009 -7.9% 22,049 23,887 -7,7%
Service revenues (million) - mobile 6,902 7,691 -10.3% 20,654 23,008  -10,2%
Adj. EBITDA (million)  3,568 4,218 -15.4% 10,634 12,570 -15,4%
Adj. EBITDA margin (total rev.) 48.3%  52.7% -4.3pp 48.2% 52.6% -4,4pp
ARPU - mobile 421 471 -10.6% 421 472 -10,8%
 - Contract 672 779 -13.7% 675 780 -13,5%
 - Prepay 169 186 -9.1% 170 194 -12,4%
Non-Voice % of ARPU mobile 24% 23% 1pp 23% 22% 1pp

 
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.