Improved commercial performance translates into continued revenue growth and stabilization of EBITDA AL

At the end of the second quarter of 2023, T-Mobile Poland's customer base comprised of 12.460 million customers, an increase of 353,000 (2.9 per cent) compared to the second quarter of last year. At the same time, the number of active prepaid cards decreased compared to the first quarter 2022 as a result of the deactivation of inactive support cards offered customers from Ukraine. Comparing year over year prepay customer base grew by 193 thousand and the number of postpaid customers increased both compared to the first quarter and year over year. All of this combined with the growing popularity of higher tariff plans and convergent packages, the increase in revenues from ICT services and exceeding 200,000 broadband users, allowed T-Mobile to generate revenue growth of 2.7 per cent despite the loss of some operator billing revenue due to MTR regulation. T-Mobile's revenues for the period amounted to PLN 1.66 billion.
The second quarter of the year was another one in which the company faced an increase in operating costs. In particular, the cost of electricity purchase grew, although this increase was largely offset by the positive effects of the vPPA contract. As a result, the operator generated quarterly AL EBITDA of PLN 466 million, a level similar to that of the same quarter last year, with a slight increase. This increase represents a reversal of the negative trends observed in the previous two quarters, with an improvement in AL EBITDA of PLN 27 million compared to the first quarter of the year.

With T-Mobile, we want customers to have access to a complete service offering. That is why we focus on convergent packages, combining fixed, voice and entertainment services. But this entire offering would not be complete without our care for the highest quality technology and most importantly: customer service. We see this combination yielding strong results. Unfortunately, recent quarters have seen, in addition to commercial success, cost growth so intense that at times it offset the benefits of revenue growth - this has been the case in the last two quarters. It is therefore wording very good news that we are ending the second quarter of 2023 with a reversal of this trend. The partial mitigation of the effect of the increase in operating costs thanks to the commissioning of the first green energy farms under the vPPA, combined with very satisfactory commercial results, has resulted not only in a stabilization of the result, but even in an improvement, said Andreas Maierhofer, CEO of T-Mobile Poland.

The virtual Power Purchase Agreement signed last year, under which 5 photovoltaic and wind farms are being built specifically for the T-Mobile contract, is now not only one of the key elements of T-Mobile's environmental care strategy, but also an important tool for compensating for rising energy costs. With 3 PV farms already in operation, it is possible to largely limit the impact of an annual over 60 per cent increase of in the cost of purchasing energy. The wind farms will be commissioned in the second half of the year, making it possible to offset this burden even more effectively.
 
The divergence between revenue growth and its reflection in profitability result shows how seriously the business of companies like ours is affected by the continuing significant increase in costs. This is especially important now that we are not only investing in the development of our mobile network, but also expanding our fibre infrastructure, data centers, developing our ICT and security competences, and are ready to invest in the rollout of the 5G network in the coming months, said Juraj Andras, T-Mobile Polska CFO. All this is possible thanks to the actions initiated and implemented before: the adoption of a strategy focusing on quality and constant concern for the financial stability of the company, which are paying off today and allow us to operate with full efficiency despite the difficult economic environment.

Another milestone from T-Mobile's perspective in the second quarter was the creation of T Hub unit in Poland – a structure dedicated to drive, contribute to, and deliver various international scale projects for the Deutsche Telekom Group. Over the next 3 years, the T Hub will employ 500 IT, NT and other specialization experts, carrying out tasks both for the DT Group itself and for the needs of the company's customers, including the automotive and banking sectors, EU digitization solutions or German government projects.
 
Focus customer experience and convergent offers

T-Mobile is continuing its strategy of providing its customers with the best possible experience, and starting in the second quarter of 2023, it is giving prospective users this opportunity as well. This is made possible by introducing a 30-day service trial option to all post-paid and bundled offers. At the same time, T-Mobile is the first operator in Poland to provide the opportunity to test mobile internet for free for 3 months via eSIM without changing the current operator.
Equally important, T-Mobile is betting on the development and promotion of convergent services. In the second quarter of this year, the operator not only expanded its MagentaTV service with 12 new TV channels, but also offered customers to purchase convergent services for up to 9 months for free. Such measures translated into an increase in interest in service bundle offerings – comparing sales of service bundles with fiber in the second quarter of 2023 to the preceding quarter, the increase was 6.8%, while the operator recorded a 22% increase in sales of fiber alone, comparing the second quarter of 2023 to the same period in 2022.

Technology to empower business and cities

The second quarter of 2023 in T-Mobile's business segment sees the continuation of the development of technologies that support not only companies, but also cities and the planet. Thus, for large corporations, the operator has implemented the 'Secure Internet' service, which allows for comprehensive protection of a corporate internet connection. Smaller businesses, on the other hand, can grow faster with T-Mobile thanks to the refreshed MagentaBIZNES offer, in which the operator has been offering an extended range of services since mid-May this year. The offer has been enriched with, among other things, higher transmission speeds, a higher data limit or higher device discounts. Activities focused on creating solutions that allow small and medium-sized companies to grow in the second quarter of 2023 resulted, among other things, in more than 15,000 customers with active fibre service and another period with a positive balance of number portability.
Equally importantly, the new technologies implemented by T-Mobile are also a positive influence on the development of cities and the planet. Already a special measuring buoy is floating in Wrocław, monitoring the state of pollution in the Oder river, and the operator received an award at the Smart City Forum for its smart metering solutions for another year in a row. T-Mobile is continuing its partnerships in education area and development projects, including with Siemens in the area of private campus networks, with the Kraków Technology Park in the area of Industry 4.0 and with Kozminski University in Warsaw in the area of postgraduate studies in Cyber Security Management.

Investing in the quality of service

Following the shutdown of the 3G network, T-Mobile is focusing on getting LTE base stations up and running as quickly as possible in its place. Customers can already take advantage of 3100 stations upgraded from 3G to LTE, which means not only an increase in data speeds, but also an improvement in the quality of voice calls thanks to voice-over-LTE technology. At the end of the second quarter, 70% of the voice traffic on the operator's network was already via VoLTE and VoWIFI. But this is not the end of the improvements. T-Mobile is consistently continuing development of  its 5G network based on the 2100 MHz frequency and DSS technology and preparing infrastructure for the upcoming rollout of 5G based on the new awaited 3,6 GHz spectrum. In the second quarter, the number of base stations offering fifth-generation network coverage in this technology exceeded 50% of all stations available on T-Mobile's network, and the 5G network now reaches more than half of Poland's population. In Q2 the amount of data traffic in T-Mobile’s mobile network grew by 25% year-over-year.
In the second quarter of 2023, T-Mobile once again proved that technology can serve the environment. At the end of April, the operator launched a test power supply installation for the base station, which consists not only of the already used photovoltaic panels, but also wind turbines and an energy storage system. Equipped with a new, ecological power supply system, the base station in Brudzowice is the first project of its kind in Poland.

Responsibly for the environment

In addition to the development of environmentally friendly technologies, the operator can also boast two implementations that are closely related to the support of biodiversity. The first is the launch of an analytical buoy that monitors the state of the water in the Oder River, making it possible to detect possible threats at an early stage. The second is the implementation of an bird monitoring project - thanks to the loggers set up, scientists can track and analyse the behaviour of endangered species of eagles. The company's commitment to environmental topics was further complemented by its involvement in this year's Earth Day celebrations, which included the creation of an employee zone. For a week, it promoted green solutions and encouraged employees to, for example, donate their old phones or test new electric cars.
In the whole first half of the year T-Mobile cut its total energy consumption by 5% and CO2 emissions by 24% compared to the adequate period of 2022. Currently 100% percent of the energy used by the company comes from renewable resources. Comparing to the year 2019 when T-Mobile announced its carbon footprint improvement program the company decreased its CO2 (indirect and direct combined) by 99%.
It is worth mentioning that the operator received two prestigious awards in the last quarter: "Polityka's" Golden Leaf confirmed its active, strategic involvement in sustainable development activities, and its presence on the "Diversity IN Check" list confirmed the high quality of its DE&I activities. In addition, as many as 10 of our operator projects were described in the 21st edition of the Responsible Business Forum report, the largest review of ESG initiatives in Poland.