Telekom Romania operations maintain stable evolution, according to Q3 2014 results


Telekom Romania Communications


  • Approx. 1.4 million TV subscribers;
  • ProForma EBITDA higher by 7.5% for first 9 months of 2014 yoy;
  • 38% higher revenues from ICT projects;
  • Over 100% increase in revenues from non-core activities.


Telekom Romania Mobile Communications


  • Revenues up by 5% compared to Q2 ‘14;
  • Total revenues in Q3 ’14, up by 9% yoy, excl. impact of the interconnection rates cut;
  • ARPU up by 5% in Q3 vs. Q2 ’14;
  • 9M postpaid customer base up by 3% yoy;
  • Business customer base up by 6.4% in 9M 2014 versus 9M 2013;
  • Data traffic up by 125% in Q3 2014 vs. Q3 2013. 


Telekom Romania Communications and Telekom Romania Mobile Communications announce key performance indicators for the third quarter of 2014 fiscal year, which ended at September 30th, 2014, as reported by OTE Group.


The results indicate a stable performance of Telekom Romania operations, laying the basis for the sustainable growth we anticipate in the medium and long run. At the same time, the figures reflect the considerable impact of unpredicted regulatory and taxation measures, together with the necessary investments in the rebranding of the operations into T. This considerably limited our capacity to invest in commercial initiatives, with indirect effects in new additions. Nonetheless, the constant growth on key areas, such as the business segment, broadband revenues, and postpaid customer base offer a solid base for Telekom Romania to further consolidate its market position as an integrated network offering complete solutions”, said Anastasios Tzoulas, Chief Financial Officer, Telekom Romania operations.


Despite market conditions, the two companies continued their investment plan in Q3. Most of the 2014 investments aim at expanding the FTTH, 3G and 4G networks.



Telekom Romania Communications


The financial results reported by Telekom Romania Communications for the first three quarters of this year show a stable path, with growth rates in the strategic areas: TV and IT&C solutions. The wholesale segment also maintained its growth rates. The decision to focus on telecoms specific operations was reflected in non-core activities revenues growth of over 100%.


Pro Forma EBITDA for the first 9 months of 2014 was by 7.5% higher than the same period last year, reaching 118.4 million Euros (35 million Euros for Q3 2014). For the first 9 months, Telekom Romania Communications reported a revenue increase of 2.4% as compared to the same period last year, amounting to 457.7 million Euros. Q3 2014 revenues remained stable, at 151.3 million Euros. EBITDA for the first 9 months was affected by the special constructions tax, with a significant impact on the company which owns, historically, an infrastructure based on copper and canalizations.


The strategy of the company, focused mainly on delivering quality TV content on various TV platforms, lead to a steady growth of the customers base, which reached approximately 1.4 million in Q3 2014. The number of Internet customers remained at the same level, as compared to the same period last year. The revenues corresponding to the two segments continued to register growth in Q3 2014, of 7% for TV and 6% for broadband Internet respectively. These partially offset the 14% decrease of fixed voice revenues.


RGUs, at 4.8 million for Q3 2014, remained stable compared to the same period last year.


The consolidation of the position of turn-key IT&C solutions provider reflected in 38% higher revenues on this segment in Q3 2014, generated, mainly, by contracts for systems solutions and IT&C projects. The wholesale segment revenues, 11% higher in Q3 2014 vs Q3 2013 due to increased traffic, contributed heavily to the company revenues.


Other non-core activities posted growth of over 100% due, mainly, to the capitalization of real estate portfolio.



Telekom Romania Mobile Communications


In Q3 2014, Telekom Romania Mobile Communications kept a stable evolution. On the business segment, despite intense competition, Telekom Romania Mobile Communications maintained its position. In the first 9 months of 2014, compared to the same period last year, the business customer base increased by 6.4%, while revenues from B2B posted a 12.7% increase. The growth was driven mainly by the uptake of the Business XXS – XXL Plus portfolio, dedicated mainly to SMEs or to small or home offices. Most popular business subscriptions are those with unlimited communication in all national networks, also coming with mobile data and a smartphone.


The postpaid customer base increased by 3% at 9M 2014 vs. 9M 2013, reaching a ratio of 26.8% out of the total 5.9 million customer base of Telekom Romania Mobile Communications (including Zapp).


Telekom Romania Mobile Communications total revenues in Q3 would have posted a 9% increase, compared to the same period from 2013, excluding the impact of the interconnection rates cut.


Total revenues in Q3 2014 reached 107 million euro, up by 5% compared to Q2 2014. Pro Forma EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) reached 25.5 million euro, similar to the previous quarter. EBITDA margin reached 23.8%in Q3 2014, while service revenues increased by 4% compared to Q2 2014, driven by boost of sales following the rebranding.


Blended ARPU (Average Revenue per User) increased by 5% in Q3 2014 compared to Q2 2014, reaching 4.78 euro.


Data traffic more than doubled compared to Q3 2013, registering a considerable growth of 125% yoy. The 4G services expanded significantly, triggering a 75% increase in data traffic and a doubling of the number of active 4G users in Q3, compared to Q2 2014. Also, broadband revenues maintained the upward trend from the previous Qs, posting an increase of 26% yoy, following investments in technology.


Also, the sale of smartphones more than doubled at 9M 2014 compared to 9M 2013, registering a 110% growth.


At the moment, Telekom Romania offers 4G coverage to 50% of the urban population and 27% of the total population (urban and rural). In Bucharest, 4G covers 98% of the city area, while in Brasov and Poiana Brasov, main tourist destinations, the coverage is 98% and 100% respectively


Customers who are not  in the 4G coverage area can bennefit from  4G Experience, an advanced connection based on HSDPA 3G dual carrier technology that allows speeds up to 43.2 Mbps, in 269 towns and over 5,056 localities.


In Q3 2014, mobile operations of the OTE Group provided telecommunications services to approximately 15.2 million customers in SE Europe.