As HT’s competitors, A1 and Tele2, published their Q1 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 Q1 2019 results and we bring you some key takes regarding their performance on the Croatian market. To make the results comparable we transferred Tele2’s results into EUR.
A1
In Q1, A1 recorded an increase in sales of 2.6% YoY, amounting to EUR 102.1m. The sales grew as a result of higher service revenues. Fixed-line service revenues continued to grow, backed by the strong TV business supported by UEFA Champions League content. Mobile service revenues were also higher as a lower ARPU was more than outweighed by higher subscriber numbers driven by the demand for mobile WiFi routers and successful promotional activities.
When observing the company’s operating expenses, they amounted to EUR 70.3m, representing an increase of 1%. The slight increase could be attributed to higher market investments reflected in content costs, equipment costs and commissions which were almost fully offset by lower frequency usage fees due to the cut as of November 2018 and lower bad debt. As a result, EBITDA increased by 6.3%, amounting to EUR 31.7m.
In Q1, CAPEX (for the Croatian segment) increased by 79%, amounting to EUR 24.7m. The increase could mainly be attributed to the acquisition of frequencies in the 2.1 GHz band in the amount of EUR 7.2 m.
Tele 2
Turning our attention to Tele2, their Croatian segment observed an increase in end-user service revenues of 10% YoY, amounting to EUR 27.4m. However, adjusted for the non-recurring revenue reported for Q1 2018, end-user service revenue grew organically by 14%, due to a 6% higher RGU base and a 7% increase in ASPU.
Meanwhile, total revenues amounted to EUR 45.5m, representing an increase of also 10%. It is noteworthy, that all segments the company’s operations observed an increase in Q1.
When observing the company’s adjusted EBITDA (excluding IFRS 16) it amounted to EUR 8.6m (+173%). This could be attributed to higher end-user service revenue, lower spectrum cost and a continued focus on cost efficiency. Meanwhile, adjusted EBITDA amounted to EUR 11.4m.
The quarter started with prolonged Christmas campaigning, and the market later focused on hardware and convergent offers. Tele2’s unique Unlimited products remain at the center of its offerings. The strengthening of the retail channel continued with the insourcing of another three stores, ending the quarter with a total of 18 Tele2-managed stores.
