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O2 Czech Republic reports ‘strong financial performance’ in 2018 on O2 TV and mobile growth

30 Jan 2019

Czech fixed and mobile operator O2 Czech Republic (incl. O2 Slovakia) reported that total consolidated operating revenue reached CZK37.996 billion (USD1.686 billion) in FY 2018, up 0.8% year-on-year. Operating revenue in the Czech Republic segment declined by 0.2% to CZK30.713 billion, with 1.6% growth in mobile turnover (to CZK20.311 billion) being offset by a 3.6% drop in fixed revenue to CZK10.402 billion. In a press release, PPF Group-controlled O2 noted that mobile data, financial services, O2 TV and hardware & accessories sales revenue were the ‘key revenue growth drivers, more than compensating continuous decline in traditional voice, data and SMS/MMS revenue’. In Slovakia, meanwhile, total operating revenue improved by 7.9% y-o-y to EUR292 million (USD333.8 million) where, similar to the Czech Republic, higher data and hardware sales revenue were identified as key growth drivers.

The group said that consolidated EBITDA improved by 6.2% on an annualised basis to CZK11.163 billion in the twelve months under review, driven by higher revenue, savings in the majority of costs and a positive impact of new IFRS accounting standards. In the Czech Republic, EBITDA grew by 5.1% to CZK8.507 billion, while Slovakia reported a 12.8% increase to EUR104 million. Consolidated EBITDA margin improved by 1.5 percentage points to 29.4% in FY 2018, although group net profits declined by 2.5% y-o-y to CZK5.448 billion due partly to the one-time sale of its stake in Taxify in FY 2017 while ‘higher investments into sport rights, transformation of IT system and network in Slovakia led to depreciation & amortisation growth’ in FY18.

On the operational front, the group reported that the number of O2 TV (mobile) customers subscribed to any of its M, L or XL monthly tariffs – and those watching television on the web or in applications – increased by over 34% to 758,000 active accesses. Further, the number of post-paid mobile subscribers increased by a net 165,000, or 4.8%, in 2018 helping boost the overall total by 2.0% to 5.038 million. At the start of 2019 O2 reported that close to 70% of connections on the Czech mobile network were smartphones and over a half of total handsets now support LTE technology. ‘As the next step towards 5G, in mid-November, O2 began offering a new generation of mobile home internet using 3.7GHz band with up to 100Mbps speed to the customers living out of reach of fixed broadband network,’ the firm said in its statement. ‘5G home broadband internet will bring also unlimited data volumes as well as higher capacity, allowing for example HD video playback or seamless O2 TV watching,’ it claimed.

In the fixed segment, O2 Czech Republic said that the number of O2 TV customers on O2 fixed lines (IPTV) as well as over internet connections from any provider (OTT), reached 335,000 at 31 December 2018; of these, some 40,000 households now subscribe to the telco’s complementary MULTIservice, which enables customers to watch TV on multiple TV sets at once.

Czech Republic, Slovakia, O2 Czech Republic (incl. CETIN), O2 Slovakia

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