O2 today announced its operating and financial results for the first half 2016. Consolidated figures include the results of subsidiaries, including O2 Slovakia.
Despite continuous pressure mainly in corporate segment and since May also impact of new roaming regulation, O2 succeeded in maintaining flat revenue year on year and slightly increase operating profitability. It strengthened its position in digital O2 TV, mobile data and Slovakia. In addition O2 recorded positive feedback among the customers to the new unlimited tariff for fixed calling.
"Unlimited callings from fixed lines to all networks, which we have been offering since beginning of the year are popular among our customers. This is confirmed by the fact, that with the new tariff they call by 40 % more, number of minutes to mobile networks increased by as much as 210%", says Tomáš Budník, Chief Executive Officer and the Chairman of the Board of Directors of O2 Czech Republic "Also the popularity of digital television O2 TV is growing. In last twelve months we recorded 35 thousand new customers. Number of those who watch TV via internet or at mobile devices increased by two and half compared to last year", he adds.
"Growingcustomers' demand is positively reflected also in our financial results. So we were able to invest into the areas which will bring customers new enjoyments. We acquired additional exclusive sport rights so at the beginning of August we will introduce brand new O2 TV Football channel. To be able to offer our customers faster mobile data connection, in recent auction we acquired more than a half of available spectrum", adds Tomáš Kouřil, company's Chief Financial Officer and Vice-Chairman of the Board of Directors.
Operating overview
Mobile segment
As of the end of June 2016, mobile services provided by O2 were used by a total of 4.898 million customers. The number of contract customers increased by 1.4% year-on-year reaching 3.298 million. Thus they represent already 67.3% of the mobile customer base, up by 1.6 percentage point. Number of prepaid customers reached 1.600 million customers.
Helped by LTE network rollout and tariff proposition with increased data package mobile data traffic increased by 80% year-on-year. Number of internet in handset service went up by 15% year-on-year to 1.672 million.
More than 50% of handsets in O2 network is already a smartphone and one fourth supports LTE technology. Number of customers with LTE smartphone and with USIM card, which supports the new technology, reached 661 thousand at the end of June and continues growing.
Fixed segment
Number of active customers of O2 TV service provided on O2 fixed line as well as on internet connection from any provider reached 217 thousand (IPTV and OTT), up by 14.4% year-on-year. This number includes also customers who subscribed for the free service within special "Try and Keep" promotion and decided to switch to a paid tariff. A complementary service MULTI which enables customers watching TV on more TV sets at one time became very popular. More than 30 thousand customers subscribed for this service and thus O2 can show off with almost 250 thousand active set top boxes. Unique features (time shift, recording etc.), and also own O2 Sport channel with multidimension drive increasing demand for digital television.
The customers also lie watching O2 TV via internet and mobile application, or in Staropramen restaurants, pubs and bars. Number of watchers, who actively watch O2 TV via internet and mobile application, increased two and half times year-on-year and in June these means of watching TV were already used by close to 300 thousand watchers.
Number of
xDSL fixed internet customers reached 782
thousand at the end of June 2016.
Thanks to internet speed increase through installation of
remote DSLAMs, the share of customers enjoying VDSL technology
on total xDSL base reached already 60%, up by 9 percentage
points. During the first half 2016, O2 increased the internet
speed for as many as close to 80 thousand households.
Vast majority of households has been passed to new tariffs, introduced in January, which offer unlimited calls from fixed line to all mobile and fixed networks in the Czech Republic. The proposition thanks to which the customers do not need to count called minutes and are not charged any fee for line rental is liked among the customers. This is confirmed by the fact that with new tariffs customers call in average by 40% more. Total number of fixed voice lines reached 760 thousand at the end of June 2016.
Slovakia
Number of mobile customers in Slovakia increased by 7.4% year-on-year to 1838 thousand. Through O2 Business Services O2 in Slovakia newly offers also fixed services for corporate customers.
Financial overview
Total consolidated operating revenue reached CZK 18.223 billion in the first half 2016, down 0.9% year-on-year. Operating revenue in the Czech Republic totalled CZK 15.104 billion, representing a 0.9% decline. Fixed business operating revenue decreased by 1.5% year-on-year to CZK 5.651 billion, while mobile operating revenue were 0.5% lower reaching CZK 9.453 billion.
EBITDA increased by 4.7% year-on-year to CZK5.053 billion, net profit improved by 9.8% year-on-year reaching CZK 2.552 billion.
In Slovakia revenue reached CZK 3.280 billion, marking a year-on-year decrease of 0.6%. Revenue denominated in euros improved by 1.2% to EUR 119.
KEY FINANCIAL AND OPERATING INDICATORS
Financial indicators for the Group
| Financial indicators | 1H 2016 | 1H 2015 | Year-on-year change |
| Operating revenue | CZK 18.223bn | CZK 18.392bn | - 0.9% |
Total costs -of which operating costs | CZK 13.208bn
CZK 3.820bn | CZK 13.31bn
CZK 3.971bn | -2.4%
-3.8% |
| EBITDA | CZK 5.053bn | CZK 4.825bn | +4.7% |
| EBITDA margin | 27.7% | 26.2% | + 1.5 p.p. |
| Net profit | CZK 2.552bn | CZK 2.325bn | +9.8% |
Operating indicators - Czech Republic
| Number of mobile service customers | 1H 2016 | 1H 2015 | Year-on-year change |
| Contract customers | 3.298m | 3.252m | +0.2% |
| Prepaid customers | 1.600m | 1.693m | - 5.5% |
| Total | 4.898m | 4.945m | - 0.9% |
| ARPU | CZK 286 | CZK 284 | +0.9% |
| Number of fixed service customers | 1H 2016 | 1H 2015 | Year-on-year change |
| O2 TV | 217k | 190k | +14.4% |
| O2 TV application and web (number of watchers) | cca. 300k | cca. 100k | |
| xDSL | 782k | 799k | -2.1% |
| VDSL | 468k | 404k | +16.1% |
| Fixed voice lines | 760k | 883k | -14.0% |
| Smartphones | 1H 2016 | 1H 2015 | Year-on-year change |
| Smartphone penetration within the O2 network | 51.8% | 43.7% | +8.1 p.p. |
| LTE smartphone penetration within the O2 network | 24.9 % | 11.7 % | +13,2 p. p. |
Contacts
Lucie Pecháčková
lucie.pechackova@o2.cz
tel: 800 163 342 (800 1 media)
O2 is the largest integrated telecommunications provider in the Czech market. At present we operate close to eight million mobile and fixed accesses, which ranks us among the market leaders in fully converged services in Europe. To users of mobile services in the Czech Republic we offer state-of-the-art HSPA+ and LTE technology. We have the most comprehensive proposition of voice and data services in the Czech Republic, and we actively exploit the growth potential of the various business lines, especially ICT. Our data centres, with total floor area of 7,300 square metres, rank us among the leaders in hosting, cloud and managed services. O2 data centres belong to the few commercial ones in Central Europe to have TIER III certification. With our O2 TV we are also the largest IPTV service provider in the Czech Republic. In January 2014, O2 became a member of the Czech investment group PPF.
