Wireless and DSL drive Telekom’s Q1 growth

26 May 2004

Telekom Austria says its revenues grew by 2.4% to EUR989.4 million in the first three months of 2004 thanks to buoyant performances from its broadband and wireless divisions. EBITDA reached EUR416.7 million, up from EUR405.9 million in the corresponding period of 2003, whilst net profit increased by almost 90% to EUR70.7 million after the operator reduced its consolidated net debt by EUR100.6 million to EUR2.54 billion.

Telekom’s first quarter pre-tax profits from its wireless activities rose by 10% to EUR209 million. In its home market, which is approaching saturation, its wholly owned subsidiary Mobilkom Austria added 7,400 new subscribers to take its total to 3.17 million. Its domestic market share fell slightly from 43.3% to 42.9% as a result, with average quarterly churn rising by 0.6% to 4.6%. Telekom’s Slovenian mobile arm Si.mobil grew its subscriber base by 3% to 361,700 in the first quarter, giving it a market share of 23.5%, up from 23.1% twelve months previously. Its Croatian subsidiary VIPnet increased its customer base by 11% to 1.24 million during the same period. Telekom is planning to expand into other areas of eastern Europe and to this end is due to begin talks to buy into Bulgarian cellco Mobiltel. It is thought that Mobitel’s private shareholders will offload up to 60% of Bulgaria’s fastest growing mobile operator in July.

Telekom Austria’s wireline revenues fell by 3.7% to EUR535.2 million in 1Q 04. Domestic voice minutes declined by 4.1% due to falling national call volumes, whereas international and fixed-to-mobile calling volumes rose compared to the same period last year. Including internet dial-up minutes, which fell by 9.1% to 1.02 billion, total minutes declined by 6.2% to 2.48 billion.

Telekom’s overall market share based on minutes (including internet dial-up) increased slightly to 55.4%, compared to 55.2% at the end of March 2003. The total number of access lines under its control fell by 3% to 2.99 million, although ISDN connections increased by 2.3%. ADSL connections increased by 30,700 to 291,800 in the first three months of 2004, including wholesale customers, which rose from 53,500 to 64,100.

Telekom chief executive Heinz Sundt told reporters during a conference call yesterday that his company would continue talks with Swisscom over a possible merger, despite initial discussions between the two breaking down late last year over price.