O2 Czech Republic has released its unaudited financial results for the three months to 31 March 2015, highlighting that consolidated operating revenue increased by 3.7% year-on-year to CZK11.160 billion (USD456.4 million), and noting that its y-o-y performance is improving, when compared to the previous quarters (-9.6% in Q1 2014, -8.3% in Q2 2014, -3.2% in Q3 2014 and -0.5% in Q4 2014). The telco says the recent performances have been helped by ‘the improving spend trend and growing data revenues in the mobile segment, solid growth of wholesale transit revenues in the fixed segment and continuous revenue growth in Slovakia’. Fixed operating revenue in the Czech Republic reached CZK4.916 billion, up 3.2% on an annualised basis, showing ‘a stabilised trend of operating revenue quarter-on-quarter’, while mobile operating revenue in its home market reached CZK4.732 billion, up just 0.4%, impacted by ‘intense competitive pressures with decline in traditional voice and messaging revenue, which were more than offset by uptake in data and hardware revenues’. Meanwhile, turnover at its business in Slovakia stood at EUR58.2 million (USD65.2 million) a 17.1% year-on-year increase.
Consolidated earnings before interest, depreciation and amortisation (EBITDA) increased 25.6% y-o-y to CZK4.332 billion in 1Q15, fuelled by revenue growth and the group’s focus on improving its operational efficiency, as well as what it terms ‘growing profitability’ in Slovakia; EBITDA margin reached 38.8%, up by 6.8 percentage points from a year before. Consolidated CAPEX in the three months under review stood at CZK771 million, up 26.9% when compared with 1Q14, as O2 Czech Republic continued to focus on investments in growth areas of the business (i.e. the deployment of LTE networks using the spectrum purchased in 2014, 2G/3G mobile network sharing and consolidation, further capacity expansion and improvement of the quality of mobile broadband network, in line with the growing demand for mobile data services). Additionally, the telco is investing in its fixed line business, notably via capacity enhancements of its fixed broadband networks by VDSL expansion via construction of new remote DSLAMs, it said.
Operationally, O2 Czech Republic reported a total of 5.013 million mobile subscribers in its home market at end-March 2015, of which 3.269 million were post-paid (+1%) and 1.744 million were pre-paid (-4.7%). Moreover, smartphone penetration reached 41.6% of the total base at the end of March 2015, up by eight percentage points, with the carrier noting that smartphones accounted for about 75% of all new phones sold in the first three months of this year – 90% of which were LTE smartphones. At the end of March 2015 LTE smartphones accounted for 22% of all smartphones in the O2 CR network, it said. In the fixed line business, O2 CR reported 931,000 xDSL accesses at end-March, up 1.4% y-o-y, thanks to net additions of 8,000 in the quarter. Within this figure, O2 said that the share of the high speed VDSL accesses continues to grow, reaching 47% (or 435,000) accesses at end-March, up 14.8% from a year earlier. The total number of O2 TV customers reached 188,000 at the end of the period, up 15.5% year-on-year thanks to maintained popularity of the new O2 TV service launched in 2013. The total number of fixed voice lines in service, however, declined by 10.3% to 906,000 at the end of March, with ‘decelerating net losses’ (22,000) during the period.