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Telefonica O2 CR net profits up 30%

25 Jul 2008

Czech fixed and mobile operator Telefonica O2 Czech Republic reported revenues of CZK15.8 billion (USD1.04 billion) for its fiscal second quarter ended 30 June, up just 0.6 of a percentage point of the corresponding year-earlier period. The group said that while sales from its mobile activities had risen 3% year-on-year to CZK8.4 billion, the gain was partially offset by a 5% fall in turnover at its fixed line division to CZK7.2 billion. Group OIBDA increased by 6.5% however, to reach CZK7.6 billion, while net profit climbed 30.4% y-o-y to CZK3.4 billion – aided by the sale of some property assets. 2Q08 CAPEX was CZK1.6 billion, down 16.7% on the previous year.

At the end of June 2008 Telefonica O2 CR reported 5.2 million mobile subscribers (up 6% on 2Q07), of which 2.37 million were on monthly contracts. Mobile ARPU fell marginally from CZK529 in 2Q07 to CZK523 a year later, while revenue from data services increased 6.8% to CZK505 million. The operator said it added 7,000 data users in the April-June period for a total of 212,000 at the end of June.

Telefonica O2 CR’s fixed line base continues to erode. The operator recorded a 12.2% decline between June 2007 and June 2008, leaving it with 1.94 million fixed telephony accesses at the end of the period. The net decrease in main lines in service was 58,000 in the second quarter, against 73,000 in January-March and 81,000 in 2Q07. On a more positive note, the telco reported strong demand for its ADSL broadband internet services which totalled 598,000 connections (retail and wholesale)at the end of June 2008, up 13.5% on the same time a year earlier. The total number of O2 TV customers increased to 98,000 at the end of Q2, it said.

Commenting on the results, Salvador Anglada, CEO and Chairman of Telefonica O2 Czech Republic said, ‘I am glad that in the first half of 2008 we delivered solid results. Mobile business continued to be the key driver of the group’s growth. Our continuous effort focusing on efficient operation enabled us to keep the manageable costs under control thus maintaining a high operational margin. In addition, a sale of a part of our real estate portfolio positively contributed our results for the first half.’

Czech Republic, O2 Czech Republic (incl. CETIN)

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