O2 Czech Republic increased net profit by 2.5% in 9M17

25 Oct 2017

Fixed, broadband and mobile operator O2 Czech Republic has published its financial results for the nine months ending 30 September 2017, reporting a 0.6% year-on-year increase in operating revenue to CZK27.893 billion (USD1.28 billion), compared to CZK27.720 billion in 9M16. Broken down, the group’s Czech mobile division contributed CZK14.816 billion of the total (up 3.5% y-o-y), the domestic fixed line business CZK8.006 billion (down 6.9%) as a 10.2% rise in O2 TV sales failed to offset falls in fixed voice and ICT revenue, and its Slovak operation added CZK5.230 billion (+6.0%) helped by a strengthening in the krona (CZK) versus the euro (EUR). Group EBITDA, meanwhile, declined by 0.6% on an annualised basis to CZK7.804 billion, with an EBITDA margin of 28.0%, and net profit edged up 2.5% to CZK4.114 billion, up from CZK4.012 billion in the corresponding period of 2016. Consolidated capital expenditures in 9M17 reached CZK3.019 billion, compared to CZK3.098 billion in the same period 2016, with O2 CR noting that CAPEX was impacted by a number of one-off items in 2016, such as the CZK1.472 billion related to the acquisition of spectrum licences in 1800MHz and 2600MHz bands in the Czech Republic. CAPEX in the first nine months 2017, meanwhile, included CZK210 million for the 450MHz spectrum licence renewal for an additional 15 years (effective 8 February 2018), and CZK782 million related to the extension of the O2 brand licence agreement with Telefonica by three years, taking it to 27 January 2022.

O2 CR closed out September 2017 with a total of 4.917 million mobile subscribers, broadly unchanged in twelve months, of which 3.383 million are contract customers (+1.6% y-o-y). O2 said that in the past year, contract users increased by a net 53,000 and now account for 68.8% of the total mobile base (up 1.1pp), with pre-paid users totalling 1.534 million. The rise in post-paid users has been helped by the introduction of bundled propositions, such as O2 Spolu (launched in May 2017), which in turn is driving mobile data traffic. The company said that the number of people actively using internet-ready handsets climbed 29.2% y-o-y to 2.246 million. At end-September 2017, 61% of handsets on the O2 network were smartphones, 42% of them supporting 4G LTE. Further, more than 80% of customers with a 4G handset had already exchanged a SIM card to one supporting LTE technology.

In the domestic fixed line segment, O2 CR reported that the total number of xDSL fixed internet customers reached 742,000 at the end of September 2017, down from 774,000 previously, although efforts to upgrade DSLAMs meant that more than 70% of the total (528,000) are now hooked up via VDSL. IPTV users (O2 TV) increased by 4.5% to 230,000, but fixed voice lines slumped a net 92,000 to 635,000 over the same period. Finally, O2’s Slovakian mobile unit reported a total of 1.916 million mobile users at end-September, up 2.8% y-o-y, of which 1.118 million are contract customers (+6.9%).

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

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