Telekom Romania announces financial performance for Q1 2016

Telekom Romania Communications and Telekom Romania Mobile Communications announce key performance indicators for the first quarter of 2016, ended March 31, 2016, as reported by OTE Group.

2016-05-05 11:44:47

"The first three months of 2016 reflect a positive performance in terms of revenues for mobile operations, while fixed revenues registered a decrease, partially due to the downward trend on the fixed voice segment. The fixed-mobile convergent proposition, under the MagentaONE offers, remained an important growth driver for Telekom Romania, with an increase by 30 per cent in the quarter compared to the end of 2015. In addition, mobile data generated a solid growth
of our mobile broadband customer base, on both residential and business segments", said Anastasios Tzoulas, Chief Financial Officer, Telekom Romania operations.

Telekom Romania Communications

The financial results reported by Telekom Romania Communications for Q1 2016 show a decrease in revenues, but a positive trend on key areas such as fixed-mobile integrated offers and TV. In Q1 2016 revenues reached 137.1 million euros, 7.8 per cent lower than in Q1 2015. ProForma EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization, excluding impact of restructuring plans) for Q1 2016 was of 20.5 million euros, 37.5 per cent lower compared to Q1 2015.

Telekom Romania Communications reached 270,000 customers for MagentaONE fixed-mobile convergent offers adding more than 62,000 in the quarter. This growth generated an increase of mobile revenues by 83 per cent in Q1 2016 vs. Q1 2015.

On the TV segment, customer base increased by 2.5 per cent in Q1 2016 compared to Q1 2015, reaching 1.449 million, while corresponding revenues remained relatively stable, registering a slight decrease of 1 per cent in Q1 2016 vs. Q1 2015. Revenues generated by IPTV RGUs had the highest growth compared to other TV technologies in Q1 2016 vs. Q1 2015. Regarding FTTx, the focus remained on further increasing the penetration of this technology in the already covered regions. Customers opting for this technology benefit of speeds of up to 1 Gbps for broadband and of interactive television (IPTV) services.

Broadband subscribers decreased in Q1 2016 by 1.8 per cent to 1.195 million compared to the same period of 2015, while corresponding revenues decreased by 4 per cent year on year.

Telekom Romania Communications wholesale revenues increased by 2.1 per cent in the quarter compared to Q1 2015.

Fixed and mobile RGUs increased by 1 per cent in Q1 2016 compared to the same period last year, reaching 4.827 million.

Telekom Romania Mobile Communications

Telekom Romania Mobile Communications registered total revenues of 113 million euros in Q1 2016, marking a 9.5 per cent increase versus Q1 2015. Service revenues in the quarter amounted to 77.1 million euros, down by 1.9 per cent versus Q1 2015.

Mobile broadband service revenues registered an increase by 6.4 per cent in Q1 2016 compared to the same quarter of 2015, while the mobile broadband customer base increased by 15.3 per cent in the quarter as compared to the same period last year. The total number of 4G customers increased 6 times (629 per cent) in Q1 2016 versus Q1 2015, while 4G data traffic increased almost 8 times (780 per cent) in Q1 2016 versus the same quarter last year. In addition, 93 per cent of the terminals sold by Telekom Romania Mobile Communication in Q1 2016 were smartphones.

At the end of Q1 2016, the total customer base (including Zapp) stood at 5.654 million, down by 4 per cent compared to Q1 2015. Postpaid customer base remained relatively stable in the quarter, up by 0.8 per cent compared to Q1 2015, accounting for 29 per cent of the total customer base.

The business segment maintained its positive evolution in Q1 2016, with an increase in customer base of 5.5 per cent on a yearly basis, and with a strong increase in mobile broadband customers base, of 16.7 per cent in Q1 2016 versus Q1 2015.

In the quarter, Telekom Romania Mobile Communications added in its business portfolio several strategic accounts, such as Imperial Tobacco Distribution Romania SRL, the Romanian subsidiary of one of the largest tobacco manufacturers worldwide, Topanel Group of companies, a top Romanian manufacturer and supplier of thermo-insulating materials, and Inter Cars Romania, one of the main players in the local market of auto spare parts, accessories, tires and car service equipment, as well as of aftermarket solutions.

Blended ARPU (Average Revenue per User) in Q1 2016 stood at 4.4 euros.

ProForma EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization, without redundancy cost) reached 18.3 million euros in Q1 2016, while ProForma EBITDA margin stood at 16.2 per cent, down by 5.5 pp compared to Q1 2015.

At the moment, Telekom Romania offers 4G coverage to 57 per cent of the urban population and 32.4 per cent of the total population (urban and rural). In Bucharest, 4G covers 98 per cent of the city area, while in Brasov and Poiana Brasov, main tourist destinations, the coverage is 98 per cent and 100 per cent respectively. In addition, Telekom customers that are not located in the 4G area can enjoy the 4G Experience, with an advanced connection based on 3G HSDPA dual carrier technology that allows speeds of up to 43.2 Mbps in 278 cities and over 5,000 other locations.

Following the recent agreement between Telekom Romania and Orange România, Telekom customers will soon be able to roam in Orange's 4G/4G+ network and enjoy 4G and 4G+ mobile communication technologies even when they are out of the Telekom Romania Mobile 4G network coverage, through Orange's 4G/4G+ network, which has an overall population coverage of 72 per cent, while it reaches 96 per cent in urban areas.