JAKUB CHAJDAK19.02.2020

T‑Mobile Polska results in 2019 – solid base for growth: EBITDA increase, rising client base

In the year 2019 T‑Mobile Polska recorded:

  • EBITDA AL growth of 15 million PLN (ca. 1% compared to 2018), despite adversities at the beginning of the year
  • Growth of service revenues by 3%
  • Stable revenues of 6.4 billion PLN (-1.8% year-on-year)
  • 10.954 million customer base – 261 thousand contract customers growth in comparison to 2018
  • Growing customer satisfaction and loyalty, leading to a record-breaking average monthly churn level of 0.7% in contract segment starting 2Q2019
  • The operator continued its transition towards a fully convergent player, launching new plans including a complete offer for households including FTTH and entertainment offerings
  • In the business sector was successfully developing its ICT capabilities, especially in cybersecurity and digital transformation areas, gaining new high-profile clients
  • Solidified its position as technological market leader dominating the network quality consumer tests, testing the first Polish 5G network based on commercial equipment and launching a network modernization project.

After 5 years of EBITDA decline T‑Mobile Polska achieved a successful turnaround in this area and reported the first EBITDA growth since 2015. In result the EBITDA AL for 2019 grew 15 million PLN (0.9%) compared to the previous year and amounted to 1.645 billion PLN. This achievement is even more notable taking into consideration the fact that TMPL’s revenues were significantly negatively influenced by the effects of the data center fire which happened in the beginning of the year as well as changing business strategy by reducing activity in low margin and no value creating segment device of wholesale. This negative impact on revenues was in great part compensated by the growth of mobile service revenues by 3% (y-o-y) and in the ICT area.

 

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The favorable developments in financial results were accompanied by improvement of key operational factors. The customer base was growing consistently throughout the year, reaching 10.954 million by the end of the fourth quarter, gaining 261 thousand new contract customers, 3,6% as compared to the end of 2018 in huge part thanks to increasing customer loyalty, which can be clearly seen in average monthly churn level in contract dropping to record-breaking 0.7% in the last three quarters of the year.

 

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  • It’s been the third year of us following the strategy focused strongly on client experience and needs, including the best network and service quality. First of all, it meant consequent improvements in client satisfaction translating to clients’ decision to stay with us longer. Secondly, we introduced a great offer catering the complete telecommunications and entertainment needs of modern households, bringing new clients and offering the existing ones another incentive to strengthen our relationship. And last but not least, we launched a new “No-nonsense” marketing line, based largely on our customer-centric approach, which met with great reception and gained lots of traction

    – said Andreas Maierhofer, CEO of T‑Mobile Polska.

  • The effects: positive net adds throughout the year, record-breaking churn, and in result growing customer base and rising ARPU meet our expectations and translate to financial results. Starting 2020 we will follow a fine-tuned-strategy, which will be based on this solid base and will let us be even more successful in winning customers.

In the year 2019 T‑Mobile Polska reported ca. 2% growth in investments, mainly in internal IT systems required by the agile transformation the operator has been undergoing and launching the network modernization process which will allow the company to keep the network quality leadership status in the years to come.

  • The decision to change our approach in the area of wholesale handset sales combined with significant hindrance in the form of lost revenues as a consequence of the Annopol data center fire affected our results in the first half of the year. Still, rising revenues from mobile services combined with rapid growth in ICT segment and improved cost discipline allowed to us to stabilize the revenues and achieve clear improvement in results by the end of the year

    – said Juraj Andras, CFO of T‑Mobile Polska.

  • A year ago, we promised to keep the positive trends and I’m glad to see that despite some adversities we managed to keep our word.

Introduction of convergent offer, continuous focus on customer experience

The second half of the year was marked by the development of T‑Mobile's convergent offer. Since the end of June 2019, the operator's services portfolio has been expanded with fibre-optic internet and entertainment, including access to platforms such as Netflix, Ipla or Eleven Sports. Just three months later, T‑Mobile was the first operator in Poland to introduce Amazon Prime Video to its offer. Cooperation with companies offering optical fibre is also systematically developed – in the first quarter of 2020, T‑Mobile plans to launch a fibre-optic internet service on the infrastructure of Inea and Nexera. Development of convergent services remains one of the operator's priorities for 2020.

In 2019, T‑Mobile put great emphasis on improving customer experience, especially in the area of digital service channels. At the same time, customers were increasingly willing to manage their services themselves in “Mój T‑Mobile” app and by the end of the year the app was being used by 41% of the operators’ clients. Its increased popularity is also related to weekly bonuses as part of the "Happy Fridays" campaign, which allows to activate various gifts from the operator every Friday, precisely through the application – over 10 weeks more than 2 million customers took advantage of this opportunity. The activities in the area of improving customer service have been reflected in the assessment made by the company's users. In the third quarter of this year, TRIM received the highest rating in the T‑Mobile B2C segment. This direction will be continued in 2020.

Positive developments in lower and higher B2B segments

MagentaBIZNES offers enjoyed growing customer’s interest. More than half of T‑Mobile’s business clients are using the plans and their both their satisfaction and loyality have grown visibly, with churn level being at its lowest in 10 years. ARPU from MagentaBIZNES clients have also been increasing throughout the year as a result of growing popularity of value added services such as remote IT support or access to business productivity software.

In 2019 T‑Mobile Polska continued its expansion in the ICT sector, developing new capabilities and competences and almost doubling the revenues derived from this area. It has expanded its cybersecurity portfolio, launching a state-of-the-art Security Operations Center and offering compelling security products, including its Cyberguard platform. Considerable investments have been also made in data transmission infrastructure e.g. such solutions as WAN, FTTx but also collocation centers. As a part of international project, T‑Mobile has become a host to the T-Cloud structure, gaining access to the most advanced DT Groups’ cloudification know-how. In result the company acquired or developed existing contracts with a number of high-profile clients such as Supreme Chamber of Control, Ministry of Family, Labor and Social Policy, NASK, Government Administration Service Center, Agency for Restructuring and Modernization of Agriculture, Central Statistical Office, Polish National Railways, National Health Found.

T‑Mobile continued expanding its Narrow Band IoT wireless network, enabling the operator to supply its clients with a number of smart solutions designed for municipalities. Thanks to it, in 2019 T‑Mobile successfully rolled out such projects as smart parking infrastructure in Jelenia Góra, public transport information system in Tychy as well as waste management system in Wałbrzych.

Investments in network modernization to answer growing demand for data

The growing demand for data transmission which has been going on for years continued into 2019.
In the 2017-2019 period, the amount of data sent by T‑Mobile users increased by nearly 200%. Therefore, T‑Mobile continues to expand coverage where it is needed while trying to predict the future demand for services in individual regions. Additionally, in the second half of the year, 2G/3G/4G network was modernized in Warsaw. The active infrastructure of base stations was replaced as part of the project. All upgraded stations now support aggregation of 3 or 4 frequency bands, QAM256 technology and MIMO 4x4 for 1800 MHz, 2100 MHz and 2600 MHz. This allowed to increase the real data transfer speeds, and their nominal values grew to nearly 600 Mbps in the case of stations with aggregation of 3 frequency bands and 700 Mbps in the case of aggregation of 4 bands.

In 2020, T‑Mobile plans to modernize the network in other major Polish cities. At the end of 2019,
T‑Mobile customers could use the coverage provided by 11,350 base stations. 8850 of them offered aggregation of at least two frequency bands reaching with coverage to over 78% of the country's population.

Ambitious corporate responsibility goals

The strategy of T‑Mobile Polska is inseparably connected with the protection of the planet and the implementation of responsible business goals in practice. This year, the company launched the WE CARE campaign, bringing together all of its ecological activities and setting ambitious goals. These activities primarily include activities to reduce carbon dioxide emissions, save resources as well as more efficient use of energy. Among others, T‑Mobile started an internal STOP PLASTIC campaign aimed at eliminating plastic bags, cutlery, cups and straws from all of its premises. In line with the DT groups goal to severely reduce CO2 emissions the operator is in process of transitioning to green energy, acquiring 70% of electricity from renewable resources in 2020 and go fully renewable by 2021. Above all, the operator has been introducing eco-friendly electric vehicles to its fleet since 2011. In the coming years it will be replacing the company cars powered by diesel engines for alternative propulsion vehicles.

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