In Q4 2021, revenue from internet access services amounted to HRK 1.3bn, an increase of 7% YoY.

HAKOM has recently published its ICT market data for Q4 2021 in Croatia. According to the report, total revenue from fixed public communication networks amounted to HRK 263.1m, a decrease of -4.7% YoY. Of that, revenue from retail amounted to HRK 236.4m, decreasing by -2.9% YoY, while wholesale revenue amounted to HRK 26.7m, a decrease of app. -18% YoY. Meanwhile, the total number of subscribers amounted to 1.2m, a decrease of -2.2%. Of that, HT currently holds the largest market share of 50.5%, remaining at the same level YoY, while other participants on the market hold the remaining 49.5%.

Total revenue from telephone services in mobile public communications in Q4 2021 declined to HRK 974.9m, a decrease of -8.7% YoY. Such a decrease came both on the back of decreases in retail revenue, which decreased by-5.25% and amounted to HRK 826.7m, and the wholesale revenue, which decreased by -24.1% and amounted to 148.2m. In the retail segment, revenue from residential users, which constitutes 75% of the retail revenue, decreased by -6.24% and amounted to HRK 622.4m, while at the same time, revenue from business users decreased by -2.1% and amounted to HRK 204.3m. Meanwhile, the total number of mobile active subscribers amounted to 4,402,213, a slight increase of 0.61% YoY.

Looking at the market share by subscribers, we can see that the situation remains mostly unchanged for the last couple of quarters, with HT maintaining the highest market share at 45.5% (an increase of 0.6 p.p. QoQ but a decrease of -0.2 p.p. YoY), followed by A1, which currently holds 35.4% market share, an increase of 0.1 p.p. QoQ and 0.7 p.p. YoY. Lastly, we have Telemach, which holds 19.2% of the current mobile market share, a decrease of -0.6 p.p. QoQ, -0.4 p.p. YoY.

Mobile Subscribers Market Share, Q4 2019 – Q4 2021 (%)

Total revenue from internet access services amounted to HRK 1.3bn, an increase of 7% YoY. The increase came solely on the back of mobile internet revenue increase, which increased by 11.3% and amounted to HRK 842.1m. Fixed internet revenue remained roughly the same (-0.04% YoY). The total number of internet subscriptions also increased, growing by 2.4% and amounting to 5,765,220.

Total revenue from television services increased by 4.3% to HRK 216.7m, with the total number of pay-TV subscribers amounting to 873k, an increase of 2.6%. IPTV users were up 1.1% and amounted to 449k, while at the same time, satellite TV users decreased by -3.5% and amounted to 140k.

So, with all this data in mind, how did the two largest telecom companies in Croatia, Hrvatski Telekom and A1 perform during 2021?

Hrvatski Telekom

The trends seen in the whole market are also quite reflective of the largest telecom company in Croatia. During the year, HT recorded revenue of HRK 7.39bn, a decrease of -0.9% YoY due to deconsolidation and sale sof Optima in H2 2021. When adjusting revenue for Optima contribution in H2 2020, it can be concluded that in 2021, HT Group organic revenue increased by 1.1% YoY, driven by strong mobile and core fixed business despite the shift in System Solutions revenue due to a focus on high margin deals. Looking at the segments, revenues in mobile, broadband & TV & data, and fixed wholesale all increased, growing by 8.3%, 5%, and 21.2% YoY. At the same time, fixed voice revenue, other fixed revenue, and system solutions revenue experienced a decrease, declining by -4.4%, -39.4%, and 24.1%, respectively. It should be noted that the decrease in other fixed revenue is mostly due to a part of that revenue being reported under broadband & TV & data revenue, increasing one and decreasing the other. EBITDA before exceptional items AL (after leases) increased by 5.3%, driven by strong commercial momentum and positive impact of transformation measures, amounting to 2.88bn. EBITDA AL adjusted for Optima contribution increased by 7.9% YoY, with the fifth consecutive quarter of EBITDA AL growth demonstrating continuation of strong positive commercial momentum and positive impact of transformation measures. Finally, net profit increased 4.5% YoY, amounting to HRK 615m, on the back of mobile revenue growth combined with lower OPEX growth.

A1

Meanwhile, the 2nd largest telecom company in the Croatian market, A1, recorded revenue of HRK 3.42bn, an increase of 5.6% YoY. Services revenue grew by 5.7% and amounted to HRK 2.87bn. Out of that, mobile service grew by 8.7%, while fixed-line service revenue remained roughly the same. The growth was supported by the redesigned mobile portfolio with 5G propositions, attractive hardware, and higher subsidy levels. EBITDA AL amounted to HRK 1.07bn, an increase of 9.8% YoY, driven by the increase in sales and operational costs decline. Capital expenditures in Croatia amounted to HRK 727.4m, an increase of 94% YoY. Considering A1 Hrvatska is part of A1 Telekom Austria, the net profit is consolidated on the Company’s entire level, and thus cannot be taken as a separate for the Croatian market only.