HT’s Competitors Publish 2019 Results

As HT’s competitors, A1 and Tele2, published their 2019 results, we are bringing you some key takes from them.

The parent companies of HT’s largest competitors, Tele2 and Telekom Austria (A1) published their 2019 results and we are bringing you some key takes regarding their performance on the Croatian market. To make the results comparable we transferred Tele2’s results into EUR.


In Croatia, competitive pressures on the mobile and the fixed-line market loosened slightly, reducing the pressure from pricing and discounts while more focus was put on convergence of services through bundling of offers.

In 2019, total revenues in the Croatian segment rose slightly by 0.7% YoY, amounting to EUR 432.8m, which was driven by solid service revenue growth of 3.2 %, driven by the increase of both the mobile and the fixed-line service revenues. Mobile service revenues in 2019 grew by 2.2% YoY (to EUR 240.2m) due to stronger demand for mobile WiFi routers as well as due to the increased number of postpaid customers driven by the shift from the prepaid segment.

Fixed-line service revenues showed a solid growth in 2019 of 2.5%, amounting to EUR 128.2m. The growth was driven by higher retail fixed-line revenues which were supported by TV RGU growth and price increases of approx. 10% in September 2019, leading further to a higher ARPL (4Q 5.2%growth YoY).

Costs and expenses declined in Q4 2019 year-on-year, driven by lower equipment costs and lower frequency usage fees as well as reduced advertising costs. The latter came in lower as the comparison period was affected by rebranding activities, while the former due to regulatory driven price reductions. Higher service revenues coupled with the above mentioned cost reductions contributed to the strong EBITDA growth of 18.6% in Q4 2019. EBITDA on the level of 2019 for Croatian segment amounted to EUR 145.1m and achieved growth of 9.3% YoY.

It is worth noting that capital expenditures amounted to EUR 86.6m, representing a decrease of 1.3%, of which EUR 7.2m was used for acquired frequency 2.1 GHz.

Tele 2

On 31 May 2019, Tele2 announced the agreement to sell its Croatian business to United Group for the value of EUR 220m. To put things into perspective, the value of the deal would account for 7.2x adjusted T12 EBITDA of the company (excluding IFRS 16 effect). The mentioned transaction is subject to regulatory approval, whose closing is expected before the end of 2019. On January 30, 2020 Croatian Competition Agency notified Tele2 and United Group of its decision to approve the transaction. A formal approval is expected to be published the coming weeks. The divestment of Tele2 Croatia is expected to be closed in H1 2020.

Following the agreement Tele2 is reporting Croatia ‘s results separately under discontinued operations in the income statement and we are bringing you key takes from it. In 2019, revenues in the Croatian segment amounted to EUR 203.1m, representing an increase of 11% YoY in local currency. When observing the company’s EBITDA, it amounted to EUR 54.3m, while EBITDA (excluding IFRS 16) amounted to EUR 42.9m, representing an increase of 155%. Such an increase came as a result of higher end-user service revenue and lower spectrum fees. Note that capital expenditures in H1 amounted to EUR 30.5m.

United Group is a provider of telecommunication services and international media content, which already in Croatia owns Nova TV, N1 and Sport klub. With the approval of the sale, United Group would become the biggest competitor of HT and A1.

Category : Flash News

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