Telekom Austria group revenues slump 1.9%

18 Aug 2010

Telekom Austria has reported group revenues of EUR1.17 billion (USD1.50 billion) for the three months ended 30 June 2010. This figure represents a decrease of 1.9% compared to the EUR1.19 billion in turnover generated during the same period one year earlier. Telekom Austria’s operating income also decreased – from EUR170.2 million to EUR134.2 million year-on-year – a drop of 21.2%. Net income slumped 16.5%, from EUR82.3 million to EUR68.7 million. The group’s wireless subscriber base grew by 5.9% to 19.2 million users as at 30 June, primarily driven by an increase in contract subscribers across all mobile operations. Although wireless revenues declined by 2.8% to EUR778.4 million in 2Q10 (primarily due to lower revenues in Austria and Bulgaria), the rate of decline slowed down compared to previous quarters. Lower prices for voice and data and lower termination tariffs were the main drivers for the revenue drop in both countries.

Mobilkom Austria, the country’s leading mobile operator by subscribers, saw its customer base grow by 7.3%, from 4.63 million to 4.97 million at the end of June 2010. The cellco’s parent company credits this growth to the company’s successful multi-brand strategy, which consists of the premium brand ‘A1’ and the basic ‘no frills’ brands ‘bob’ and ‘aonMobil’ (a.k.a. ’Red Bull Mobile’). Mobiltel, the leading mobile operator in Bulgaria by subscribers, saw its user base increasing slightly by 0.7% from 5.20 million subscribers to 5.24 million year-on-year. Of these, post-paid contract subscribers rose by 10.9% compared to the 2Q09. Mobiltel’s 3G mobile broadband service also exhibited strong subscriber growth, increasing by 75.5% to almost 73,000 customers. During the same period, Velcom, Belarus’s number two operator by users, increased its subscriber base by 8.6% to 4.14 million customers, compared to 3.81 million at the end of June 2009. However, Velcom’s market share declined from 43.1% to 41.1% due to the prominence of an aggressive third player, which continued to increase its market share at its rivals’ expense.

Vipnet, the second largest mobile operator in Croatia by subscribers, increased its base by 1.1% from 2.60 million to 2.64 million customers at the end of June 2010. Vipnet’s 3G mobile broadband subscriber base also grew, by 69.4%, to approximately 156,000 customers. Meanwhile, Si.mobil, the second largest operator in Slovenia, increased its subscriber base by 1.7% from 581,800 to 591,700 at the end of June 2010. Although the mobile penetration rate in Slovenia decreased to 101.9% at the end of the 2Q10 compared to 102.4% one year earlier, Si.mobil’s market share rose slightly by 0.2 of a percentage point to 28.2%. VIP Mobile, the third largest mobile operator in Serbia increased its subscriber base by 18.5% from 1.07 million to 1.26 million customers in comparison to 2Q09. Macedonia’s number three player VIP Mobile, increased its subscriber base by 57.4% from 224,400 to 353,000 in 2Q10. This increase meant that VIP’s market share almost doubled from 9.6% in 2Q09 to 17.1% a year later.

A Telekom Austria Group spokesperson commented: ‘The mobile communication segment remains negatively impacted by reductions in termination charges and roaming tariffs. In addition, Austria is a highly developed mobile communications market characterised by intense competition and persistent price pressure. In the Central & Eastern European (CEE) region, a challenging macro-economic environment, fiscal burden and a high level of competition shape the operational situation. Moreover, innovative products, such as mobile broadband and convergent product bundles become an increasing element of the competitive environment in CEE.’

Austria, A1 Telekom Austria, A1 Telekom Austria Group