Telekom Romania performance remains stable in Q4 2014

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Telekom Romania Communications

 

  • 4.5% more TV customers, up to 1.41 million;
  • Revenues stable at 609.1 mil. euros in 2014;
  • TV revenues up by 8.2% yoy;
  • FTTx coverage in 22 cities.

 

Telekom Romania Mobile Communications

 

  • Business customer base up by 19% in Q4 2014 vs. Q4 2013;
  • Broadband revenues up by 23% in FY 2014 vs. FY 2013
  • Data traffic up by 90% in 2014, compared to previous year;
  • 4G customers almost tripled in Q4 versus Q3 2014 (287% increase).

 

 

 

Telekom Romania Communications and Telekom Romania Mobile Communications announce key performance indicators for the fourth quarter of 2014 fiscal year, ended December 31st, 2014, as reported today by OTE Group.

 

Q4 2014 is marked, undoubtedly, by T, the rebranding which fully integrated the commercial operations of Telekom Romania Communications and Telekom Romania Mobile Communications with the aim of becoming the number one integrated network in Romania. Significant investments were made in this unprecedented process with direct impact on EBITDA. However, three months after the rebranding, the first results have started to show – encouraging number of additions for unlimited communication and entertainment bundles, steady growth on our “hero” segments, such as TV and ITC services for companies.”, said Nikolai Beckers, CEO, Telekom Romania operations.

 

Despite market conditions, the two companies maintained a positive track and continued their investment plan, most of it focusing on expanding the FTTH, 3G and 4G networks. Thus, at the end of 2014, FTTx was available in 22 cities, with expansion plans in view at a fast pace, enabling speeds between 100 Mbps and 1Gbps for Internet. Throughout 2014, 4G services reached 50% coverage in urban areas, offering speeds of 150 Mbps. Also, on the mobile side, the modernization, expansion and optimization of the network for all technologies (GSM- 2G, UMTS-3G and LTE-4G) continued, accommodating a double data traffic compared with 2013. The expansion of the mobile network coverage included mainly urban indoor, national roads and rural areas, with focus on B2B customers.

 

All these achievements were generated despite a tough year, marked by unpredicted regulatory and taxation measures with significant impact on key financial indicators. The solid strategy established for 2015 is meant to continue delivering good results throughout the year. We will continue to have a special focus on our hero segments to position Telekom Romania as the best TV experience provider on the market. On the business market we aim to mantain our leading position and to become the first choice in terms of ITC solutions”, Mr. Beckers added.

 

 

Telekom Romania Communications

 

The financial results reported by Telekom Romania Communications for 2014 show stability, with revenues at 609.1 million euros, at par with 2013 and growth on key areas such as TV and integrated offers.

 

EBITDA for 12 months of 2014 was 149.2 million, up by 1% y-o-y, while Proforma EBITDA for 2014 was up 0.4% to 159.9 million Euros, compared to the same period last year. The results have been affected by the impact of the special constructions tax, which was significant on the company which owns, historically, an infrastructure based on copper and ducts. ProForma EBITDA for Q4 2014 (41.5 million Euros compared to 49,2 million in Q4 2013) reflectshigher marketing costs associated to rebranding and a one-time transaction related to content capitalization in Q4’13 which rendered the content cost for Q4’14 much higher.

 

The successful launch of convergent services following rebranding generated an increase of mobile revenues in Q4 2014, compared to Q4 2013. The adoption of integrated bundles exceeded expectations by 52%. 

 

Commercially, TV continues to be the leading growth segment, reaching 1,414 million customers, up by 4.5% in December 31, 2014 versus same period 2013.  Corresponding revenues for Q4 2014 were up 8.2% compared to Q4’2013. The first fully fledged integrated IPTV+OTT multiscreen service in Romania offers to TV customers online access to up to 62 TV channels. As a result of constant TV content investments with focus on international sport competitions, exclusivities and premium content, the number of customers opting for L TV package with maximum of benefits has doubled. Among the most popular TV extra-options are the ones related to premium movie content.Also, the new capabilities of the available TV platforms provide a superior user experience.

 

Internet revenues in the quarter remained at the same level while broadband subscribers reached 1,232 million at the end of 2014. Almost all of them have enabled a Wi-Fi solution due to routers with such capabilities, available in our commercial offers since 2010.

 

On the business segment, despite facing a very aggressive price competition, Telekom Romania Communications succeeded in maintaining its leadership position for fixed voice and premium data services both in terms of number of lines and revenues.

 

Telekom Romania wholesale revenues decreased by 21.6% compared to Q4’13, international transit revenues compensating part of the decline generated by the reduction of fixed and mobile call termination rates.

 

RGUs, at 4.827 million for Q4 2014, remained stable compared to the same period last year.

 

Revenues from non-core activities (old copper infrastructure and real estate) were up 10% in Q4 2014 versus Q4 2013.

 

 

Telekom Romania Mobile Communications

 

Performance of Telekom Romania Mobile Communications was relatively stable in 2014, a year characterized by further expansion of the 3G and 4G networks and by the complete redesign of the postpaid offer under the T brand. 

 

More specifically, in 2014, the business segment grew by 19% on a yearly basis. This growth comes mainly from the Unlimited Business XXS – XXL and Internet Unlimited XS- XXL subscriptions launched in September. The positive evolution was also influenced by the attractive bundles consisting in subscriptions plus smartphones or tablets, which suited perfectly customers’ needs. Service revenues from the business segment increased by 7% in Q4 2014 versus Q4 2013, mainly due to mobile data consumption which doubled in 2014, as compared to 2013.

 

In Q4 of 2014, Telekom Romania Mobile Communications added in its business portfolio several important accounts, among which Selina group of companies (main player in the constructions industry) and Recaş Wineries (a well-known wine brand on the local market).   

The total customer base (including Zapp) stood at approximately 6 million, at the end of 2014, out of which 26.8% postpaid. 

 

Despite a challenging 2014, revenues in Q4 2014 amounted to 112,6 million euro. Blended ARPU (Average Revenue per User) in 2014 stood at 4.68 Eur.

 

Mobile data proved a significant growth driver, almost doubling in 2014, compared to 2013 (90% increase), in correlation with a 35% increase of the smartphones ratio out of the total terminals sold in 2014, versus 2013. The total number of 4G customers almost tripled in Q4 versus Q3, posting a staggering 287% increase.

 

Overall, 2014 revenues remained relatively stable, at 439.4 million euro, down 4.2 yoy, but up by 3.1% compared to the same period from 2014, if the impact of the interconnection tariff cut is excluded.

 

EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) margin reached 24% in FY 2014, down by 1.9pp versus FY 2013, reflecting the impact of the interconnection tariffs as well as the tax on special constructions. EBITDA reached 105.6 million euro in 2014.

 

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 4G covered areas can benefit from  the 4G Experience, an advanced connection based on HSDPA 3G dual carrier technology that allows speeds up to 43.2 Mbps, in 271 towns and over 5,287 localities.

 

At the end of 2014, mobile operations of the OTE Group provided telecommunications services to approximately 15.3 million customers in SE Europe.

 

About Telekom Romania

Telekom Romania is a new and dynamic telecommunication brand, offering complete, innovative, simplified and customized mobile and fixed communication services for a vast customers’ community, with approximately 10 million contracts.

 

Through the two operators, Telekom Romania Communications and Telekom Romania Mobile Communications, Telekom Romania provides a complete range of telecommunication services, for a full and rewarding customer experience: 3G and 4G mobile voice and mobile data services, traditional fixed telephony, high speed internet and television on multiple technologies, including IPTV, as well as high quality content and exclusivities in order to complete the entertainment experience. For business customers, the new brand is the promise for delivering turn-key IT&C solutions which support companies becoming more competitive and agile.

 

Telekom Romania brand is present on the Romanian market since September 2014, after the joint rebranding of Romtelecom and COSMOTE Romania.

 

Telekom Romania is part of the OTE Group, member of the  Deutsche Telekom Group, one of the world’s leading integrated telecommunications companies with over 142 million mobile customers, 31 million fixed-network lines and more than 17 million broadband lines (as of December 31, 2013). The Group provides fixed network, mobile communications, Internet and IPTV products and services for consumers and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in around 50 countries and has approximately 229,000 employees worldwide. The Group generated revenues of EUR 60.1 billion in the 2013 financial year – more than half of it outside Germany.