Telekom Romania reports improved performance indicators for Q1 2017

      Telekom Romania group of companies

  • Consolidated revenues for Q1 2017 of EUR 229.8 mln;
  • Adjusted EBITDA of EUR 37.1 mln for Q1 2017;

Telekom Romania

  • Revenues for Q1 2017, up by 4.6% vs. Q1 2016;
  • Positive adjusted EBITDA – up by 4.4% Q1 2017 vs. Q1 2016;
  • Threshold of almost 400,000 customers for fixed-mobile convergent services
Telekom Romania Mobile

  • Revenues down by 4.6% in Q1 2017, against Q1 2016;
  • Mobile broadband subscribers up by 4.2% in Q1 2017 vs. Q1 2016;
  • Business customer base up by 2.5% vs. Q1 2016.

Telekom Romania Communications and Telekom Romania Mobile Communications announce key performance indicators in first quarter of 2017, ended March 31, 2017, as reported today by OTE Group.

“The business stabilization trend continued in the first quarter of 2017. Moreover, some of the key areas of the business registered unprecedented growth. For example, from the mobile gross additions sales perspective for B2C post-paid, Q1 of this year has been one of the best quarters in the history of Telekom Romania group of companies.

In addition, besides the foreseen growth rates for convergent services, TV and the wholesale segment, the implementation of large IT&C projects, as well as revenues from non-core segments such as real estate, contributed to our increase in the quarter.

We are confident that the commercial repositioning in mid-April, with offers on Internet based services, will also produce relevant results in the upcoming period”, said Anastasios Tzoulas, Chief Financial Officer, Telekom Romania operations.

Telekom Romania Communications
In Q1 2017, Telekom Romania Communications reported positive performance in terms of revenues and adjusted EBITDA, mainly driven from top line increase in FMC and wholesale as well as efficiency gains in personnel expenses and lower other taxes.  In terms of customers, integrated services, respectively TV customers follow the positive trend.

In this line, revenues for Q1 2017 stood at EUR 143.4 mln, up by 4.6% versus Q1 2016, while adjusted EBITDA reached EUR 21.4 mln, up by 4.4% y-o-y.

Operating Expenses, excluding depreciation, amortization and charges related to voluntary leave schemes, increased by 6.7% in Q1 2017 compared to Q1 2016, driven by customer generated direct costs like higher interconnection, mobile handsets and customer premise equipment. The indirect costs after capitalization, excluding charges related to voluntary leave schemes were reduced by 4.6% vs prior year.

47.4% more fixed-mobile integrated services customers were reported for Q1 2017, reaching 398,242 at the end of March 2017. A slight increase was registered also by TV customers, which number grew by 0.6%, to 1.46 mln, with corresponding revenues up by 3% in Q1 2017 versus the same period of 2016. Internet TV service (IPTV) revenues had the most important growth rate – up by 20% y-o-y.

1.18 mln broadband subscribers (both fixed and mobile) were reported by Telekom Romania Communications at the end of Q1 2017, at a similar level against end of last year. Voice users (fixed and mobile) reached 2.13 mln at the end of the first three months of the current year from 2.15 mln at December 31 2016. This was reflected in lower revenues generated by fixed voice by 14% vs. same quarter of previous year.

The increase in “Other revenues” category largely reflects increased IT&C projects delivered to business customers. The year-on-year increase in “Other income” category in Q1 2017 is primarily due to the sale of various real estate assets.

Telekom Romania Communications wholesale revenues increased by 21.5% in Q1 2017, to EUR 29.4 mln, compared to the same period of 2016.

Fixed and mobile RGUs were 4.77 mln at the end of March 2017 from 4.83 mln versus the same period of last year.

On the business segment, a positive evolution was recorded as well, both in terms of new added customers but also in terms of type of offered solutions.

In Q1 2017, KFC Romania, Pizza Hut Romania, Pizza Hut Delivery Romania and Paul Romania benefited of a the complete MOA solution – Managed Office Automation, acquired from Telekom Romania, via which the specialists of the operator manage efficiently, via Telekom infrastructure, the internal network (video surveillance systems, security solution, computers, laptops etc.) from all the locations of the customer and its ERP/CRM system.

Also, GP Sofa, one of the biggest producers of upholstered furniture in Romania, currently has end-to-end solutions from Telekom, which include, besides the standard fixed and mobile services, Metronet, VPN and other customized ICT and IP based solutions. In Q1, the company acquired from Telekom a complete solution to equip a newly built production hall which includes the cabling solution, surveillance and security services.

Telekom Romania Mobile Communications
At March 31, 2017, Telekom Romania Mobile Communications registered total revenues of EUR 107.8 mln in Q1 2017, down by 4.6% compared to the same period of last year, while service revenues decreased by 7.9%, to EUR 71 mln in Q1 2017.

The customer base totalled 5.0 mln, down 11.2% from the year-earlier level. Of this total, 32.3% was post-paid. The total number of business customers grew by 2.5% compared to Q1’16, reflecting the company’s targeted offers for professional users and synergies with fixed-line operations.

In Q1 2017, mobile broadband subscribers reached 240,000, up by 4.2% against Q1 2016. The continuous increase in the past years is linked to Romanians’ need for convenient communications offers that include Internet access and mobile devices that allow them to stay connected and informed.

In this context, the positive trend is also reflected in the mobile gross additions sales segment for B2C post-paid registered in Q1 2017, which has been one of the best quarters in the history of Telekom Romania group of companies.

Blended ARPU of EUR 4.7 was up 0.3% compared to Q1’16.

The 4.6% decrease in total revenues, together with lower operating expenses, led to a 14.2% decrease in adjusted EBITDA compared to Q1’16, to EUR 15.7 mln. Alongside the Romanian fixed-line operations, Telekom Romania Mobile is taking steps to improve its performance, including enhanced 4G capabilities, refocusing of its sales efforts, and cost improvements.

In 2017, one of the digital trends for the mobile segment will be the OTT (over the top) services, such as Telekom TV Web & Mobile, as the demand for non-linear video content grows and the consumption from mobile devices is increasing.