First quarter 2006: Significant increase in the contract-customer segment

• Contract customers account for 29% of the total of 4.648 million customers
• Increase in the total revenues by 5.6%
• Total length of calls up by almost one quarter

Prague, 11 May 2006 - T-Mobile's long-term focus on the contract-customer segment and its effort to offer high-value services became fully reflected in the Company's results for the first quarter of 2006. The reported results have met the expectations and correspond to the highly competitive market environment. The total number of customers reached almost 4.65 million with more than 29% of the total being represented by contract customers. The total revenues increased year-on-year by 5.6% to CZK 6.87 billion and the net profit dropped as planned by 17.8% to CZK 1.2 billion. EBITDA amounts to CZK 3.08 billion while the EBITDA margin amounts to an excellent 44.8%. Special offers reducing the call costs proved to have a very positive effect on the total length of calls which increased by an exceptional 24.6%. An increase was also recorded in data traffic; the share of data services in the revenues per customer reached 21%.

"The results achieved have fully met our expectations and truly reflect the situation in the market," says Roland Mahler, the Managing Director of T-Mobile Czech Republic a.s., and adds: "At the moment, we substantially invest in customers, which becomes particularly reflected in the offer of favourable prices of services and tariffs. For example, we were the first operator to significantly cut the prices of roaming services, and interesting add-ons form an integral part of our offer to new customers. We believe that in the long term, this effort will have a positive effect on both customer satisfaction and financial results."

Customers: 213% increase in the number of new contract customers
The total number of customers grew year-on-year by 5.9%. The share of contract customers steadily increased to 1.36 million, which is more than 29% of the total customer base. The year-on-year increase in the number of new contract customers is no less impressive, amounting to as much as 213%.

Effective from 15 January, customers can port their numbers between mobile networks. This fact has had but a little effect on the development of the customer base - the monthly churn (i.e., the number of customers who stopped using the T-Mobile services) grew year-on-year by only 0.4 pp to a total of 1.6% in the first quarter. Heft of 8,271 customers who have ported their number to the T-Mobile network so far took advantage of the special offer and concluded a written contract. As of 31 March, a total of 11,315 phone numbers had been ported to other operators' networks.

Financial results: total revenues up by 5.6%
The financial results achieved by T-Mobile in the first quarter of 2006 fully correspond to the situation in the extremely competitive market. The total revenues amounted to almost CZK 6.9 billion, which represents a year-on-year increase by 5.6%. The net profit reached CZK 1.2 billion (decrease by 17.8%), EBITDA (earnings before taxes, interest, depreciation and amortization) dropped year-on-year by 5.3%. The EBITDA margin reached 44.8%, ARPU (average revenue per user) remained at the value of CZK 470.

Operational results: increase in the total length of calls by 24.6%
In the past period, besides the development of data services, T-Mobile particularly focused on the support of voice traffic. In the first three months of the year, T-Mobile further extended the offer of services that significantly reduce the call costs, such as Pevná+ (Fixed+) which is one of the most successful services provided by T-Mobile. These included, for example, a special offer of free-unit packages for both the existing and new customers (see here). Another area T-Mobile focused on was roaming: the special Cestovatel (Traveller) tariff add-on offers the best roaming rates in the Czech market (see here).These special offers became reflected in the significant increase of the total length of calls by 24.6%. An even more significant growth was recorded in the data traffic which increased year-on-year by almost 80%. The share of non-voice services in the revenues from services reached 21%.

"In the coming months, we will continue to adhere to our strategy of focusing on the fixed-mobile substitution and introduce more special offers," says Roland Mahler. "As an example, let me mention the offers launched in mid-April which included new tariffs and a number of add-ons. The first feedback proved to be very positive and we can already say that we are successful in finding the right solutions to the customers' needs and desires," adds Mahler.

(For more information on the offer mentioned above, please see Media Navigator)

	1st Quarter 2006	1st Quarter 2005	Change in %
Number of customers (´000)	4 648	4 390	5.9
Contract customers	1 359	1 128	20.5
Twist customers	3 289	3 262	0.8
New customers (´000)	14	30	(53.3)
Contract customers	72	23	213
Twist customers	-57	7	n.a.
Average monthly churn (%)	1.6	1.2	0.4p
Total revenues (CZK mil.)	6 876	6 511	5.6
Revenues from services	6 529	6 172	5.8
Net profit (CZK mil.)	1 205	1 466	(17.8)
EBITDA (CZK mil.)	3 082	3 254	(5.3)
EBITDA margin - total revenues (%)	44.8	50.0	(5.2p)
EBITDA margin - revenues from services (%)	47.2	52.7	(5.5p)
ARPU including foreign visitors (CZK)	470	470	-
Share in non-voice services in ARPU (%)	21	22	(1p)

Financial results in accordance with IFRS 

T-Mobile Czech Republic, a member of the international telecommunications group Deutsche Telekom, has almost 6.2 million customers, the number-one operator in the Czech market. T-Mobile is an integrated operator: in addition to telecommunications services, it offers comprehensive ICT solutions not only for companies, but also for other organizations and individuals. It provides outstanding services in the high-speed network, which was proved repeatedly by benchmark testing performed by umlaut (former P3) with Best-in-Test seal.

T-Mobile Czech Republic places emphasis on taking a responsible approach to the environment and society. It adheres to fair business practices, helps beneficial applications and services to see the light of day, supports non-profit organizations, small businesses and individuals, and lends a helping hand whenever crisis situations arise. The company’s employees serve as volunteers in many places across the entire Czech Republic.

More information about the company is available at www.t-mobile.cz, www.t-press.cz (the portal for journalists) and www.t-mobile.cz/pomahame (information on the company’s CSR activities).

Contact details of the press unit: press@t-press.cz.