T-Mobile Polska results in 2021. Positive effects of focus on the best quality and customer needs - growth of all key financial indicators

In 2021, T‑Mobile Poland recorded both revenue growth and improved EBITDA AL. Thanks to the continuation of the positive trends already observed in the previous months of 2021, in the fourth quarter alone the operator increased its revenues by 7% (y/y) and EBITDA AL by 5.1% (y/y). For the year as a whole, this translated into revenue of PLN 6.5bn, up by 0.9% year-on-year, while EBITDA AL rose by 4.6% to PLN 1.76bn. The revenue growth has been achieved despite a clear negative impact on the revenues of shifting international transit services to a dedicated company within the DT Group (visible in the first half of the year) and regulation of MTR and FTR on a level of ca. (-)200 million PLN..

In 2021, we focused on the best customer experience with our brand and network. We expanded our portfolio with comprehensive products for entire households focusing on removing limits and restrictions that hinder our customers. As part of our network expansion strategy, we have been consistently rolling out our 5G network and gradually replacing older network technologies with new ones so that customers can enjoy the best T-Mobile quality.  We have also taken actions that have a significant impact on socially important issues and are currently the biggest challenge for the world, namely climate change. Starting 2021, 100% of our energy has had an origin certificate, and we are developing our technology out of concern for the environment, also because of a part of our base stations being powered by natural energy sources (photovoltaic panels) – said Andreas Maierhofer, CEO of T‑Mobile Polska. As we all increasingly use digital technologies in our lives and work, we feel our responsibility to deliver the highest quality of T-Mobile to the Polish people. We believe that our customer-centric strategy, high quality and excellent experience, allows us to perfectly respond to the current and future needs of our current and future customers.

The positive change in financial factors is a consequence of commercial successes which have translated into operational improvements. For the full year 2021 T‑Mobile was the operator that lost the least number of customers in the MNP process of all infrastructure operators, and in the fourth quarter of the year alone it ranked first in the ranking, being the only MNO to record a positive balance of mobile number portability. Throughout the year, T‑Mobile maintained the rate of contract customer churn at a very low level, recording an average monthly churn rate of 0.7% for 12 months. As a result, by the end of 2021 T‑Mobile Poland exceeded 11.5 million customers, an increase of 344,000 compared to the previous period, it also recorded an improvement in the net ads ratio in the contract segment and consequently an increase in the number of post-paid customers. More and more customers chose the operator's convergent offer, which translated into an increase in the customer base of fibre-optic services to almost 70,000 users.

Maintaining the highest quality of service and customer care requires constant investment, as does development of the 5G network or technical facilities enabling expansion of the new, innovative services offering. Add to that the need to cope with increased inflation or rising energy prices, which is one of the key costs in the technology industry. The fact that despite the external burdens we managed to achieve revenue growth and to generate almost five percent EBITDA growth shows the true growth potential of our company and proves that we are on the right track – said Juraj Andras, CFO of T‑Mobile Polska.

 

  

 

Customer in the center of attention

When it comes to activities addressed to individual customers, the year 2021 was marked at T‑Mobile by the appreciation of existing customers, the development of convergent services and the improvement of network quality. Taking care of users was reflected not only in the continuation of programmes such as Happy Fridays with weekly gifts for users, but also in the celebration of the operator's 25^th anniversary on the Polish market.

As part of its systematic development of convergent services and its response to customer needs, T‑Mobile has implemented a new approach to offering home Internet throughout Poland. Currently, when coming to a T-Mobile shops, the user indicates the target location for Internet use and the consultant checks the technology available in that place and adjusts the offer to it, recommending the home internet offer (FMS) or the fibre. T-Mobile's fiber internet footprint is currently the second largest in Poland reaching about 4.7 million households.

The operator is also encouraging individual customers to use the 5G network, and last year's sales results show that users are increasingly willing to use this technology. In the third quarter of 2021, smartphones compatible with 5G accounted for 30% of phones chosen by T‑Mobile customers, and in the fourth quarter it already exceeded 40%. In 2022, these numbers have even higher dynamic, which is related to new tariffs introduced by T‑Mobile in January with unlimited internet in smartphones, both in terms of the number of gigabytes and speed. In January this year, 5G tariffs were already chosen by nearly 70% of T‑Mobile customers.

Business segment growing consistently

Throughout the year, T‑Mobile Poland recorded a dynamic growth in all segments of the business market. In the area of corporate customers, the company focused on the development of three key product lines supporting the digitization of Polish companies: in addition to traditional connectivity services, these included cloud solutions and cybersecurity. In order to effectively respond to the constantly growing demand in these areas, both in terms of scale of services as well as their sophistication and quality, the operator continued to expand its technological resources.

In 2021, the construction of a modern data center Szlachecka B in Warsaw was completed, which is already the sixth such facility of the operator. The new data center, with more than 1,700 square meters of colocation space, meets the highest security standards, and thanks to its connection with other T‑Mobile locations via a 400 Gbit/s Ethernet link, the company was the first in Poland to offer MetroCluster solution, providing the highest reliability and operational continuity levels to its customers. In addition to cloud services, SD-WAN offer also enjoys the interest of business customers.

Among cybersecurity products, the Cyber Guard proprietary solution, which guarantees security of mobile devices, enjoyed enormous interest. Its sales increased by 35% compared to 2020. Seeing the growing demand, T‑Mobile continues to develop its portfolio of cybersecurity products, adding to its portfolio in recent months a vulnerability testing service, Security Awareness, which allows one to check your company's vulnerability to cyber threats and verify the state of the ICT security.

Among the new contracts signed in the past year, the largest are those with the Polish Gas Company, the National Bank of Poland, the Government Administration Service Center and the State Fund for Disabled Persons. Also T-Systems company reported an increase in revenues, and the largest contracts signed in 2021 include a consortium agreement for the delivery of SAP technology for Oxygen Information Technology.

The fourth quarter was a period of numerous promotions for small and medium-sized enterprises and further increases in the number of customers in these segments. Sales of non-subscription devices (such as telephone accessories, office equipment, smartwatches, etc.), which is a new segment of the offer, implemented last year, also grew dynamically. Especially smartwatches are gaining popularity, as was made evident by the 35% increase in the number of activations of the Multisim service in the fourth quarter of the year (q/q).

In addition to attractive device prices, customers choosing the Magenta Biznes offer appreciate unlimited 5G internet. The share of the two highest tariffs L and VIP in the offer doubled in the fourth quarter (q/q). Also in terms of fixed-line access, the operator recorded growth in the small and medium business segment. During the last three months of the year, the active user base of Światłowod Biznes increased by 20% compared to the previous year. All these increases translated into a positive MNP balance in each of the four quarters of 2021.

The best network quality thanks to introduction of new technologies

Pandemic restrictions, changes in society's habits and the progressive digitalization of companies have made us use data transmission more and more often: to access entertainment, study, stay in contact with the loved ones, but also to conduct business. These changes caused the operator to record a steady growth of demand for data transmission over the year by 19% (y/y) and the amount of transmitted video content increased by 20% (y/y) - currently it accounts for 50% of transmitted data in the T‑Mobile network. To maintain the highest quality and reliability of services, T‑Mobile continued replacing older technologies with new: faster and more capacious solutions. This approach was clearly successful, as evidenced by the Speedtest award for 2021, as well as first place in the RF Benchmark 2021 rankings in the categories of average download speed and ping.

The operator continued the process, already announced in 2020, of replacing the older third-generation network with new 4G and fifth-generation technologies. In August, T‑Mobile completed a months-long process of shutting down the third-generation network operating in the 2100 MHz frequency, and the next step in this area became preparation for a pilot 3G shutdown in the 900 MHz frequency, planned for 2022-2023. At the same time, T‑Mobile continued the expansion of the fifth-generation network coverage, to reach 3,500 stations by the end of the year and a national coverage of 30% of the population.

Responsibility towards the stakeholders and environment

Pro-environmental activities continue to be a priority for T-Mobile and this direction was continued in 2021. Acting on the idea of creating technologies with care for the environment in mind as well as the strategic goal of achieving zero emissions by 2025, the company is constantly modernizing its car fleet and investing in the construction of photovoltaic installations. Currently, 100% of the energy consumed by T-Mobile already comes from renewable sources. In 2021, further environmentally friendly initiatives have also been prepared for the company's customers. Business customers were encouraged to switch to e-invoicing, in the "Magenta Forests" campaign, as part of which T-Mobile pledged to plant 100,000 trees.  Individual customers could also take advantage of the Smartphone Re:generation offer, as well as by giving away their used equipment for recycling or refurbishment, for which they receive attractive discounts on the purchase of new equipment.

Great emphasis was also placed on activities in the field of increasing network security and education and the fight against digital exclusion. In 2021, T-Mobile, together with the Digital University Foundation, continued the B.NET project, which consisted of conducting free online training for teachers on Internet safety. In 2021, the company also launched the "On the Winning Position" project aimed at young people. Collaborating with popular online creators, the Company addressed the topic of online heckling and self-acceptance. In addition, the Company continued its commitment to education and inclusion activities for seniors by implementing the "Network of Generations" initiative, in which it donated computer equipment to selected Nursing Homes and organized free training on the use of technology and consultations with Customer Service staff.

For its commitment to sustainable development and social responsibility in 2021, the operator received a key industry award: the Golden CSR Leaf awarded by the Polityka magazine. It also enjoyed an excellent result in the Ranking of Responsible Companies in which it was ranked 3^rd in its industry category, i.e. "Telecommunications, technology, media and entertainment".