Jakub Chajdak12.05.2021

T-Mobile Polska results in the first quarter of 2021 – strong growth in line with a long-term strategy

In the first quarter of 2021, T‑Mobile Polska:

  • Generated stable revenues and an increase in EBITDA AL by 4.1% compared to the same quarter of the previous year
  • Achieved further improvement in mobile service revenue by 1.8% (y/y).
  • Recorded an increase in customer base both in the prepaid and subscription segments – by a total of 223 thousand (y/y)
  • Presented new offers with access to 5G technology, fiber access and favorable data packages very well received by the market
  • Recorded growth in the area of business services, especially in relation to the development of e‑commerce and digitization of companies as well as growing demand for cybersecurity
  • Continued activities in the area of network quality improvement in response to the increased demand for data transmission

In the first quarter of this year T‑Mobile Polska generated an EBITDA AL profit of PLN 431 million. Thus, it recorded an increase of 4.1% compared to the first quarter of last year, well in line with the ambitious assumptions of the operator's long-term development strategy. At the same time, the company's total revenue remained at a level similar to last year, amounting to PLN 1.55 billion. It should be emphasized that this result was achieved despite lower revenues from tourist traffic and transferring international transit services to a dedicated structures within the DT Group. This was possible thanks to the increase in revenues from both the private and business market. Mobile service revenue increased by 1.8% (y/y) during this period.

The results of the first quarter show a growing trend in customer choices. More and more often they are driven not only by price, but rather by the quality of services. And quality has always been our key asset we have heavily been investing into – now it pays off. The second element of this trend is the search for simple and comprehensive offers. Here, our convergent offer, built on the knowledge of customer needs and placing their experience in the center of attention allows us to effectively convince them to choose T‑Mobile – said Andreas Maierhofer, CEO of T‑Mobile Polska. Despite a still difficult situation we were able to deliver a 4.1% increase on EBITDA, in line with the assumptions of our strategy focused on growth throughout the year. It shows that our approach is very well adapted to the market and allows us to successfully implement our long-term assumptions.

 

 

At the end of March this year the number of T‑Mobile customers reached 11.2 million, i.e. 223 thousand more than a year ago. Importantly, the company recorded an increase in both the base of users of pre-paid and post-paid services, as well as an increase in the number of users of fiber optic lines. At that time, the average monthly churn rate for contract clients remained at very low 0.8%.

The increase in EBITDA AL while maintaining a similar level of revenues is the result of greater focus on high-margin services, both in the private and business segment, and continuous efforts to drive efficiencies. The fact that in such a volatile environment the company not only generates strong operational results, but also maintains the pace of financial growth is a reflection of its healthy condition. Our strategy this year sets us ambitious financial goals. The first quarter shows that we are on the right track to achieve them – said Juraj Andras, CFO of T‑Mobile Polska.

 

 

Focus on service quality and customer experience

The first quarter of 2021 in private customer area at T‑Mobile was marked by improving the quality of services and customer experience. At the end of January, subscribers were offered the possibility of using the fiber-optic internet service free of charge until the end of the year, and subscribers porting in can take advantage of six months of full discount for voice and fiber services.

Postpaid customers used the increasing amount of data sent over the 5G network. At the end of the first quarter of 2021, this value was more than twice as high as in the last week of December last year. In order to smoothly handle the growing demand of customers and provide them with comfortable use of the fifth generation network, at the end of March T‑Mobile introduced new 5G tariffs with doubled data packages in select variants. Along with 5G tariffs, customers can also take advantage of a new device financing model consisting of flexible installments for 24 months with attractive discounts on equipment.

The first months of 2021 also meant increasing the comfort of using the network for T‑Mobile prepay and MIX customers. In March the operator made VoLTE and VoWiFI technologies available to this group of customers, which enable voice calls as well as sending and receiving SMS and MMS messages in the LTE or WiFi network. Furthermore, three weeks later, pre-paid T‑Mobile users were given the opportunity to use the 5G network in the new "No limit XL" offer in the GO tariff! with 40 GB of internet.

Also in March a new version of the Heyah 01 fully digital subscription brand was presented. In the refreshed offer, each new user receives 30-day access to unlimited calls, SMS, MMS and a package of as much as 20 GB for 1 zloty. After this period, the cost of the service is PLN 19.99 for 30 days, which is currently one of the most attractive offers on the Polish market.

T‑Mobile consistently offers a weekly Happy Fridays campaign, under which it provides free bonuses to individual customers. In the first quarter of 2021, the operator's users took advantage of them as many as 1.7 million times, of which the most popular was the 10 GB package distributed during the matches of the Polish national football team. On this occasion, T‑Mobile customers activated over 460.000 free gigabyte packets.

 

Digitization as a driving force for the growth in the business market

Since the beginning of 2021, the business sector is still under the influence of the pandemic, but there has also been a noticeable positive investment trend, related to the adaptation of companies to the new situation. This translated into an increase in demand for cybersecurity products as well as solutions for retail sector, which dynamically develops online sales as an important element of the growth strategy. The business for cloud solutions has also been on the rise, especially in the area of analytical solutions for e-commerce.

During this time, the operator also obtained new, demanding contracts. Among others, for the construction of the WAN network for the new National Toll Collection System at the request of the Ministry of Finance, the provision of mobile services for employees and diplomats of the Ministry of Foreign Affairs, as well as suppling mobile services and equipment for the State Sanitary Inspectorates, in order to improve the implementation of tasks related to counteracting COVID-19.

In response to the growing demand, T‑Mobile is developing its hybrid cloud offer and is working on the expansion of the Szlachecka 2 data center, which will allow it to increase its data processing capacity, catering the need of even the most demanding clients. It is planned to close the building's shell in the coming weeks. The operator is also consistently expanding its portfolio of cybersecurity products. Anti-DDoS solution for business clients has been enhanced to 200 Gbps to protect them against the largest cyber threats of this type. In addition, the Cloud Security service has been supplemented with the E-Mail Protection system, offering, among others advanced, multi-layered anti-virus and anti-phishing protection as well as effective spam detection and removal.

In the segment of services intended for smaller enterprises, the MagentaBIZNES offer enjoys constant customer interest. Customers responded very positively to the expansion of the portfolio of available devices, in particular high-end smartphones and laptops. The operator recorded an increase in all key operating indicators in this segment.

 

The highest quality of the network thanks to investments in new technologies

In the first quarter, T‑Mobile focused on the expansion of the 5G network based on the existing frequencies as well as the expansion and modernization of the LTE network. At the beginning of January this year, the 5G network was made available to customers in the Tri-City, thanks to which it covers about 6.3 million inhabitants. New stations, along with the growing selection of 5G devices and their popularity – at T‑Mobile, customers can choose from over 30 phone models which accounted for a quarter of the total volume of devices sold in the T‑Mobile network – mean that the demand for 5G services has also been growing. In the first quarter, the amount of data transferred over the 5G network doubled. Compared to the first quarter of last year, the amount of data sent to the entire T‑Mobile network increased by 32%. The vast majority of this growth is due to the most popular technology, which is LTE, and the share of data sent in the 3G network, in which less than 4% of data is sent, is consistently declining.

 

Beginning of the year with ambitious CR goals and excellent results

The strategy of T‑Mobile Polska is closely linked to activities in the field of responsible business. One of its key parts are activities dedicated to climate protection. The first quarter of 2021 brought new, ambitious climate goals set by the company. In previous years, the Deutsche Telekom Group adopted a plan according to which the total elimination of its carbon footprint – both directly by the organization and throughout the entire process from production to distribution – was to take place by 2050. According to the new strategy, the company wants to meet the zero emission (net) target for direct and indirect emissions in 2025, and the one for the entire supply chain already in 2040, i.e. 10 years earlier than originally assumed.

Digital responsibility is another extremely important area of the company's CR activities. In the first quarter, the first edition of the B.NET project was completed, which was to provide teachers with knowledge of online safety and practical teaching materials. Nearly 500 teachers participated in 16 online workshops, and 90% of them have already completed cybersecurity classes with their students. The project was also a form of activity for children and young people – 6,579 students from 113 schools took part in the interactive knowledge tournament.

T‑Mobile was also able to enjoy an excellent result in the report "Responsible Business in Poland. Good Practices”, the largest and most comprehensive review of sustainable development initiatives in the country. This year's publication describes as many as 19 of the company's initiatives. T‑Mobile's projects were included in seven categories, which shows that the company's responsible business strategy is consistent with global standards.

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