Telekom Austria FY revenues drop 3.1%; Austria, Bulgaria, Croatia all witness slump

23 Feb 2011

Telekom Austria has reported group revenues of EUR4.65 billion (USD6.34 billion) for the twelve months ended 31 December 2010. This figure represents a decrease of 3.1% compared to the EUR4.8 billion generated during 2009. The company blames the slump on lower revenues from its Austrian, Bulgarian and Croatian operations. However, Telekom Austria’s operating income increased from EUR343.9 million in 2009 to EUR437.9 million. Consolidated net income also grew year-on-year, from EUR94.9 million to EUR195.2 million. Meanwhile EBITDA dropped 9.1% to EUR1.65 billion year-on-year, with positive contributions from Belarus and the ‘additional markets’ (Serbia, Slovenia, Macedonia) unable to compensate for lower results in Austria, Bulgaria and Croatia. Capital expenditure (CAPEX) increased 7.3% to EUR763.6 million, primarily due to higher network investments in Austria and Belarus.

In operational terms, Telekom’s domestic mobile subscriber base increased by 5.6% year-on-year to reach 5.1 million, with mobile broadband customers increasing 29.4% to 653,748 during the fourth quarter. Whilst conceding that fixed-to-mobile migration is still an ongoing concern, Telekom Austria reported that it achieved a return to full-year fixed line growth, with an increase of 11,900 fixed access lines during the 4Q10; the telco cites a strong demand for product bundles fuelled by its broadband and IPTV products. Telekom’s fixed broadband subscriber base increased accordingly, growing 13.5% to 1.16 million. In Bulgaria Mobiltel’s subscriber base dropped 1.9% to 5.25 million customers; 3G exhibited a strong performance during the quarter with the subscriber base growing 110% to 126,217. During the same period, Velcom, Belarus’s number two operator by users, increased its mobile subscriber base by 6.1% to 4.35 million, supported by strong growth of mobile broadband customers, to 143,532. Vipnet, the second largest mobile operator in Croatia increased its subscriber base by 5.6% to 2.75 million customers, while its 3G subscriber base increased by 30.5% to 178,958. Si.mobil, the second largest operator in Slovenia, increased its subscriber base 5.0% to 618,900 customers, with mobile broadband users up 20.4% to 14,559 during the corresponding period. VIP Mobile, the third largest mobile operator in Serbia continued to grow its mobile subscriber base reaching 1.36 million customers at the end of December 2010, a rise of 17.8% year-on-year. Finally, Macedonia’s number three player VIP Mobile, grew its subscriber base to 442,200 customers in the fourth quarter of 2010.

An accompanying Telekom Austria Group statement read: ‘Telekom Austria Group operates in a highly competitive environment both in the fixed line and mobile communication markets. Moreover, regulatory measures in all segments intensify the negative impact on pricing levels. Continuous scrutiny of cost structures, improvements to productivity and operating efficiency as well as introducing innovative services in fixed line and mobile communication markets are therefore essential to the success of the Telekom Austria Group. In Austria, the sustained migration of fixed line voice to mobile communication remains a key challenge. However, on the back of strong demand for fixed broadband and the continued success of attractive convergent product bundles Telekom Austria Group returned to access line growth in 2010. Innovative products such as aonTV further support this trend. In Central and Eastern Europe (CEE), 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 have become an increasing element of the competitive environment in the CEE region’.

Austria, A1 Telekom Austria Group