First quarter of 2011: a good start

• The number of customers still at 5.4 million, more than half of them contract customers
• Revenues reached CZK 6.5 billion, EBITDA margin was 50.7%

Prague, 6 May 2011 – The results achieved by T-Mobile Czech Republic in the first quarter of this year mirror the situation on the Czech market, which is relatively stable. As of 31 March 2011, T-Mobile had 5.4 million customers, of which 51.4% were contract customers. Total revenues generated in the first three months of this year reached CZK 6.5 billion, EBITDA was CZK 3.3 billion and the EBITDA margin exceeded 50%. 

“Our results fully correspond to the environment in which we operate,” says Milan Vašina, T-Mobile’s Managing Director, commenting on the results. He adds: “Customers are largely loyal to their operator and users of prepaid cards are increasingly switching to contracts, which offer more favourable terms. Prices of telecommunications services have been dropping steadily, which is logically reflected in revenues. A clear trend is the growing share of data services in the revenues.” 

Customers and services
As of 31 March 2011, T-Mobile had 5.4 million customers, about the same number as one year ago. The share of contract customers of the total customer base amounts to 51%. Those customers using any of the mobile tariff plans grew by almost 100,000 to 2.8 million as compared to the previous year. The key factor contributing to the increased popularity of tariff plans is the broad offer and favourable terms of integrated services and the possibility of combining the services in bundles for attractive prices. The average monthly churn rate (i.e. the share of customers who decided to stop using the operator’s services) has remained at the very low level of 1.3%.  

Financial indicators
The financial results reflect the ever decreasing prices for services on the one hand and the operator’s high efficiency on the other. In the first quarter of 2011, total integrated revenues reached CZK 6.5 billion, which is a 9.4% decrease against the previous year. Revenues generated by mobile services exceeded CZK 6 billion. EBITDA (earnings before interest, taxes, depreciation and amortization) reached CZK 3.3 billion (a decrease of 5%). The EBITDA margin on total revenues grew to 50.7%. 

The average revenue per user (ARPU) was CZK 370, which is 10.8% less than in the first quarter of last year. One of the parameters that has been growing in recent years is the share of non-voice services in the revenues from mobile services, representing 24% as of 31 March 2011.   

Data services stand out in the first quarter
This year is proving to be the year of data services: during the first quarter of this year, T-Mobile introduced a broad offer of smart phones at favourable prices and extended its offer of data services with the addition of time-limited mobile internet bundles intended for both contract customers and prepaid Twist card users. T-Mobile customers can also get ADSL access for CZK 399 per month when combined in the 2v1 (“2in1”) bundle.

An attractive offer was also prepared for users of T-Mobile TV – the TV Standard plan can be purchased for CZK 299 per month. 

In the first quarter, T-Mobile continued to invest heavily particularly in the rollout of its high-speed 3G network. As of 31 March 2011, 42.5% of the population and 329 cities and communities of the Czech Republic were covered by the 3G network. As of today, coverage has been extended to 45% of the population and 406 cities and communities. 

“Today it is clear that an operator’s main task is to retain its existing customers. Naturally, a necessary prerequisite of this is reliable services at a reasonable price; but this alone is not enough,” says Milan Vašina. “We try to provide to our customers not only high-quality care and assistance when they need it, but also other benefits to reward them for being with us.” 

For this reason, T-Mobile launched Magic Tuesdays in March, offering the operator’s customers the opportunity to get benefits at selected partners or to use specially-priced services. 

More information about the services and developments in the first quarter is available on http://en.t-press.cz/tiskove_zpravy.

'000	Q1/11	Q1/10	Change % y.o.y.
Customers (end of period) - mobile	5,446	5,449	-0,1%
- Contract	2,798	2,700	3.6%
- Prepay	2,648	2,748	-3.6%
Net adds - mobile	-21	-7	n/a
- Contract	27	48	-43.8%
- Prepay	-48	-56	-14.3%
Average monthly churn - mobile	1.3%	1.3%	0.0%p
- Contract	0.5%	0.4%	0.1%p
CZK	Q1/11	Q1/10	% y.o.y.
Total revenues (million) - integrated	6,537	7,216	-9.4%
Service revenues (million) - mobile	6,043	6,777	-10.8%
EBITDA (million) - integrated	3,314	3,489	-5.0%
EBITDA margin (total rev.)	50.7%	48.4%	2.3%p
ARPU - mobile	370	415	-10.8%
- Contract	579	672	-13.8%
- Prepay	146	167	-12.6%
Non-Voice % of ARPU mobile	24%	23%	1%p

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.