Jakub Chajdak26.02.2021

T-Mobile Polska results in 2020 – growth of all key financial factors despite demanding surroundings

In 2020, T-Mobile Polska recorded:

  • Revenue increase by 1.1% and EBITDA AL by 2% compared to 2019.
  • Consistent improvement of mobile service revenues by 4.6% (y-o-y).
  • Increase in both the total clients base to the level of 11.2 million and an increase in number of contract clients
  • Maintaining churn in the contract segment at a record low level for the whole year, which lead to reaching the ratio of 0.7%.
  • In the fourth quarter, maintaining revenues at a stable level and maintaining EBITDA at the previous year's level, while allocating a significant part of it into the payment of a special bonus for the employees reflecting their contribution towards the overall strong performance of the company in 2020.
  • Throughout the year the operator maintained the highest level of services and customer care, as well as adapted its offer accordingly to the growing demand for data transmission and digital services.
  • In the business area, it supported clients during the digital transformation of companies, in particular in the area of cloud services, connectivity, data center and security, forecasting a continuous increase in demand for these solutions.
  • The company optimized how the network operates and continued to develop it in order to maintain the highest quality of services. Also launched the fifth generation network and expanded its range.

In line with its strategy, in 2020 T-Mobile Polska generated an increase in both annual revenues and EBITDA AL, which amounted to PLN 6.46 billion and PLN 1.68 billion, respectively. Compared to the previous year, the operator recorded an improvement in revenues by 1.1% and by 2% in terms of EBITDA AL profit. Importantly, these increases were achieved despite the lower roaming revenues and the more difficult, volatile market situation. Despite this volatility, the operator's revenues grew steadily compared to the previous year for three quarters, to stabilize in the fourth quarter. EBITDA AL in the fourth quarter was affected by payment of a special annual bonus of EUR 500 for all T-Mobile’s employees.

Undoubtedly, in 2020 T-Mobile services became a vital center of our customers' lives, being a basis for remote work, education, family entertainment and even running whole businesses. It is a great responsibility for us, but also an opportunity to develop close relationships with our customers. The increase in their loyalty shows that the strategy focused on the highest quality of services and customer care has allowed us to achieve this goal – said Andreas Maierhofer, CEO of T-Mobile Polska. From the perspective of our goal to generate a stable EBITDA growth, we should point out two challenges: the need to deal with additional expenditures necessary to maintain the quality of the network under the increased traffic and transition smoothly to remote work model of the whole company as well as lower revenues from roaming. We are pleased that under these circumstances not only we’ve achieved this goal but even allocated a significant part of our fourth quarter profit to the payment of a special annual bonus to employees as a sign of appreciation for their contribution towards the company’s success throughout the year.

 

 

Achieving such positive results was possible thanks to the consistent improvement of key operating indicators, in particular the expansion of customer base. At the end of the year, it amounted to 11.198 million, which means an increase compared to the previous year by 244.000 mobile customers. The company was consistently increasing its broadband client base recording almost 40.000 clients by the end of 2020, out of which 30.500 were FTTH customers. Throughout the year, T-Mobile lowered the average monthly churn rate of contract clients to a record low of 0.7%.

After a very promising start to the year, we very quickly faced the challenge of a decline in roaming revenues due to reduced tourist traffic and the need to suspend operations of a sizeable part of our shops. In this situation, the strong financial stability of the company, developed over the past years, turned out to be a great asset in terms of crisis resistance. It allowed us to smoothly adapt to the new working model, and at the same time continue network investments without interruptions, as well as invest in customer experience – said Juraj Andras, CFO of T-Mobile Polska. – The actions taken, combined with the growth of the base and effective addressing of the growing needs for digital services on the part of our clients, allowed us to achieve our financial goals.

 

 

Hand in hand with customers during the pandemic

T-Mobile Polska's activities in 2020 aimed at individual customers were largely determined by the COVID-19 pandemic. This was reflected not only in the change in marketing communications, but also in offers, new contact channels and additional pro-customer activities.

In order to meet the increased demand for the Internet related to remote work and learning, the operator throughout the year offered weekly free bonuses to customers as part of the Happy Fridays campaign. Users activated them nearly 13 million times, using over 74 million free gigabytes. In addition, at the end of the year, individual customers of T-Mobile received 2 weeks of free, unlimited mobile Internet for Christmas for free.

In 2020, T-Mobile also focused on the development of convergent services, with particular emphasis on fiber-optic internet. At the end of the year, this service’s footprint reached approx. 3.5 million households, and customers already using optical fiber from T-Mobile assessed positively both the service itself (over half of 9 and 10 ratings on a 10-point scale) and the sales process (75% of indications 9 and 10) as well as the installation process (80% of ratings 9 and 10). Optical fiber sales in each subsequent month of 2020 systematically increased. Additionally, at the beginning of 2021, T-Mobile provided its existing subscribers with a fiber optic service for free until the end of the year under a 24-month contract.

Despite the pandemic limitations, T-Mobile did not forget about infrastructure development and providing customers with the highest quality network. From mid-2020, the operator's clients can use the 5G network. The range of smartphones in the operator's offer that support this standard is also becoming wider – in 2020, every fourth device introduced in T-Mobile operated in 5G standard. Currently, customers can choose from 26 smartphones and two 5G routers.

 

A proven partner in digital transformation

In the B2B area, 2020 was marked by the dynamic digitization of business. T-Mobile specialists supported clients both in the projects of transitioning entire enterprises to remote work model and launching e-commerce services under time pressure, but also helped to implement complex ICT solutions, allowing companies to optimize costs and maintain efficiency. The company recorded a rapid increase in the demand for connectivity, both in the form of an increase in the number of orders for new lines and an increase in the existing line parameters. Customers responded positively to the expansion of the cloud services offer, and the constantly developed digital competences in this area were noticed by the market when at the end of the year T-Mobile was recognized in the Digital Excellence Awards competition in the Transformational Capabilities category.

T-Mobile supported the public sector by helping to digitize offices and healthcare. Its offer addressed to the education sector met with great interest of schools and universities, which due to the pandemic situation had to switch to remote teaching. The “Przyjazna Szkoła Zdalna” project run by T-Systems, Microsoft and the Chmura Krajowa consisting of free support in the configuration and launch of the MS Teams platform covered over 700 educational institutions. Another large project supporting remote learning was the delivery of 40,000 SIM cards for School Multimedia Kits.

Among the clients acquired in 2020 by T-Mobile and T-Systems, there were such enterprises as: Państwowe Gospodarstwo Wodne Wody Polskie, Polska Spółka Gazownictwa, Agencja Restrukturyzacji i Modernizacji Rolnictwa, the National Health Fund in Kraków, and the West Pomeranian University of Technology in Szczecin. Cooperation with the gas transmission operator Gaz-System was also expanded. Last year the operator also launched the first private telecommunications network in Poland, created specifically for one business client. The campus network based on 5G technology was launched by T-Mobile in Krakow, in ASTOR locations.

The clear increase in interest in ICT services fits perfectly with the project of building a new Szlachecka data center, on which T-Mobile has been working throughout the year. In October last year, the foundation act was laid for this investment, and the opening of the facility for customers is scheduled for autumn 2021. The new investment meets high security standards confirmed by certificates, and its high energy efficiency puts it on a par with the most modern data processing centers. Developing the offer of advanced ICT services for companies, in recent months T-Mobile has introduced SD-WAN to its portfolio, which will complement the existing WAN connectivity offer, as well as a new cybersecurity product - Cloud Security - providing the company with protection of devices and networks against cyber threats at a very high level, a level previously available only to the largest organizations.

The company has also implemented a number of projects in the area of smart cities and the Internet of Things, including the launch of the municipal monitoring installation in Augustów and the intelligent parking system in Wrocław. Using the nationwide mobile network in the NB-IoT (Narrowband for Internet of Things) standard, T-Mobile implemented smart metering solutions for thermal energy companies in Koszalin and Kraków, as well as announced participation in the first project of the smart agriculture operator in Poland.

T-Mobile is also successful in the small business segment. The flagship offer of MagentaBIZNES already boasts over 1.2 million contracts and the small business segment is constantly growing.

 

Network investments in response to the growing demand for data

During the last 12 months T-Mobile has been very active in the network area. The beginning of the pandemic resulted in a significant increase in the demand for mobile telecommunications services - in just a few days a jump of 40% took place in the number of calls and the amount of data transferred increased by about 25%. Throughout 2020, the average monthly amount of data sent within the T-Mobile network increased by over 40%.

In mid-2020, T-Mobile commercially launched the 5G network, which currently, thanks to 1,650 base stations operating on 2100MHz frequencies, reaches around 6.3 million inhabitants of Poland. In the following months of 2021, the launch of the 5G network on the same frequencies in other large Polish cities can be expected. At the same time, T-Mobile is constantly ready to build a 5G network on new frequencies as soon as they are allocated.

In the fourth quarter, the process of implementing VoLTE technology on the network side for pre-paid customers was also completed. In February this year, this technology, which allows to make telephone calls using the LTE network, was made available to the first group of customers. Contract customers have been able to use VoLTE since 2016. Currently, this technology accounts for over 20% of all voice traffic within the network. The launch of VoLTE for prepaid customers is one of the first steps in preparation for T-Mobile's 3G network shutdown scheduled for 2023.

 

Ambitious goals in the area of social responsibility

The strategy of T-Mobile Polska is inextricably linked with the protection of the planet and the implementation of responsible business goals in practice. This year, the company launched the WE CARE campaign, which incorporates all its ecological activities and sets ambitious goals. The activities mainly include those aimed at reducing carbon dioxide emissions, saving resources, as well as increasing energy efficiency.

T-Mobile has already started an internal STOP PLASTIC campaign, in which it has resigned from plastic bags in showrooms and minimized the use of plastic products in offices. In line with the DT group's goal of significantly reducing CO2 emissions, the operator is also in the process of switching to green energy. In 2020, the company used 70% of energy from renewable sources, and in 2021 it plans to use only green energy. In addition, T-Mobile has been introducing environmentally friendly electric vehicles into its fleet since 2011. In the upcoming years, it will replace company cars powered by diesel engines with vehicles with an alternative drive, including hybrid ones.

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