In the third quarter of 2022, T‑Mobile Polska:
- recorded a 3.8% (y/y) increase in revenues despite the still visible negative impact of MTR regulation that continues to be visible;
- increased revenues made it possible to compensate for the operator's dynamically rising operating costs, including an electricity price increase. As a result, the operator has generated stable EBITDA AL compared to the third quarter of last year (up 0.2%);
- successfully attracted prepaid and postpaid customers in both private and business market segments, as well as expanded the customer bases of the fibre-optic service clients and the users of two or more T‑Mobile products;
- continued its focus on maintaining a superior customer experience and recorded a further increase in interest regarding the Magenta Dom convergent offering;
- successfully increased the customer base of the MagentaBIZNES offer and continued to develop the business in the corporate segment, particularly in the areas of security and ICT;
- offered customers the highest quality data transmission due to the modernisation of the mobile network.
At the end of Q3 2022, the number of T‑Mobile Polska’s customers amounted to 12.3 million – up 214 thousand in comparison to the previous quarter and 896,000 year-on-year. The increase in the number of customers was recorded in all segments, including postpaid, where the quarterly contract net adds amounted to 61 thousand (up 3.4% year-on-year). Furthermore, according to the Office of Electronic Communications report, in the third quarter of the year T‑Mobile once again not only achieved the best number portability result among the four largest mobile operators in the country but was also the only one to record a positive balance in that regard. Apart from the increases in the customer base, the operator's result was also positively influenced by the rise in revenue from the sale of devices, the steadily growing purchases of fibre-optic services, as well as the increasing share of customers choosing not only a single service but entire convergent packages from T‑Mobile, which include a TV offer in addition to voice and fibre-optic internet services. As a result, T‑Mobile achieved a 3.8% year-on-year increase in revenue, which amounted to PLN 1.67 billion in total.
Despite this rise in revenue, EBITDA AL improved by 0.2 per cent and thus remained at a similar level to last year: PLN 458 million. This is mostly the result of the apparent increase in the majority of the operating costs. In particular energy costs, which represent the highest operating cost of T‑Mobile's network, were 74% higher in the third quarter than in the comparable period a year ago.
Taking into consideration the difficult economic situation, we consider the third quarter to be a successful one for us. Thanks to our convergent offering, we are attracting not only individuals but entire families choosing full-service packages. Consistently focusing on the needs of customers and the quality of their experience allows us to increase their loyalty towards our brand - said Andreas Maierhofer, CEO of T‑Mobile Polska. - The rise in revenue noted this quarter, driven by strong market performance, allowed us to offset a significant increase in operating costs. This is an excellent confirmation of our strategy execution even in more difficult economic times.
In terms of responsible business, the third quarter of 2022 at T‑Mobile Polska was marked by the consistent implementation of the company's ESG strategy, which focuses primarily on the areas such as climate, circularity, digital inclusion and people. Recent months have seen the launch of the 'Planet Matters' initiative, which aims to educate people on how to properly recycle old devices, as well as encourage customers to return unused smartphones. The operator also continued its efforts to support people from Ukraine. The start of the new school year provided the perfect opportunity to develop strategic cooperation with the city of Lublin. The company donated 2,000 school backpacks to the children residing there and financed the employment of 2 teachers from Ukraine in Lublin institutions for the entire school year. These educators will work to reduce the language barrier, supporting the children and youth in the integration process.
T-Mobile is a technology leader, which requires us to keep consistently high level of investments, even in difficult times. Therefore, the basis of our strategy in the financial area has been to ensure that the company is financially strong and stable - this consistent approach is paying off today. In addition to the expenses related, among other things, to investments in the network or the increase in operating costs that all companies face today, we are confronted with major increases in the price of electricity, which is becoming the largest of the operating costs of our network. The fact that we have managed to offset this major cost increase demonstrates the superior resilience of our company to market fluctuations - said Juraj Andras, CFO of T‑Mobile Polska.
Listening to the voice of the customer
In 2022, taking care of T‑Mobile’s customer experience took a structured form. The operator has implemented the Medallia system to track customer satisfaction on an ongoing basis. Since the program's launch in February, the operator's customers have completed more than 175,000 surveys. Among other things, this has allowed the operator to implement improvements suggested by the customers themselves, such as changing the billing cycle.
New services, including the Magenta Dom convergent offer, are also being surveyed – in the first wave of the survey, customers rated the entire offer highly, which was also reflected in an increase in sales by nearly half, comparing data from July and September 2022.
Listening to the voice of the customer also took place in the development of the first 5G smartphones from T‑Mobile. Currently, most Poles use smartphones priced up to PLN 1,000, and with the “Bez limitu” offer, the T Phone 5G falls just within this price ceiling, and the T Phone Pro 5G exceeds this amount by just a few dozen zlotys. These models in the first month of sales accounted for nearly 6% of total smartphone sales at the magenta operator.
Business customers choose T‑Mobile
In the mass business market segment, T‑Mobile has recorded an increase in the number of customers. They are increasingly opting for the higher MagentaBIZNES tariff variants and 5G services. Customer loyalty also remains at a very high level – a fact that was emphasised in a recent advertising campaign in which the operator reported that 9 out of 10 customers stay with T‑Mobile permanently.
In the segment of the largest enterprises, currently, the company is observing an increasing interest in ICT, Data Centre and cybersecurity services. The latter, in the form of the proprietary Cyber Guard product, were recognised in the form of an award by Gazeta Finansowa in the 'Product for Corporations' category.
During the reported period, T‑Mobile won a number of service contracts for public customers. These included: contracts for data transmission services in 329 locations for the Agency for Restructuring and Modernisation of Agriculture, the provision of IPV VPN and Internet access for PKP Intercity, the provision of WAN data transmission services for the Institute of Meteorology and Water Management, and the acquisition of a contract for mobile services for the Polish Air Navigation Services Agency.
Investments in the best network quality
As T‑Mobile's customer base grows, so does the demand for data from all users. The data traffic on the operator’s mobile network has been up around 40 per cent year-on-year. This is a continuing trend that T‑Mobile is addressing by upgrading its network and preparing it for increased usage. In the third quarter, the operator upgraded around 400 of its base stations, continued to develop its 5G network on the frequencies it owns (mid-band), and also increased the number of stations connected to the network via fibre optic lines. These activities allowed T‑Mobile to maintain the highest quality of data transmission – the operator consistently topped the rankings for download speeds in RFBenchmark and SpeedTest.pl.
The process of switching off the 3G network in order to allocate the 900MHz band for the construction of newer generation networks, initiated by T‑Mobile, is progressing as planned. By the end of the third quarter, it was being extended to include further areas. In the following months, the operator plans to cover the poviats of Łódzkie and Mazowieckie, with the aim of completing the project by the end of 2023. Importantly, turning off the 3G network allows for reducing the electricity consumption in the operator's network.
As T‑Mobile continues to implement its ESG strategy, in addition to its activities related to helping refugees from Ukraine and educating them about appliance recycling, the company has undertaken several further initiatives. It started cooperation with the Our Earth Foundation, became a partner of the "Underwater Clean Up the World" initiative, participated in a competition for kindergartens and schools, funding attractive prizes for the most engaged institutions, and created the educational platform www.planetamaznaczenie.pl highlighting the benefits that come with the recycling of the unused smartphones. Furthermore, an educational programme for T‑Mobile’s employees was launched. The project named "ESG? We are ready!" is designed to introduce them to the key areas of the ESG strategy and the reasoning behind them.
The third quarter of this year also saw the launch of the company's Sustainability Report 2021, which was prepared in accordance with the Global Reporting Initiative GRI Standards and externally verified by an independent auditing company. An electronic version is available at https://raport-t-mobile-polska.pl. The landing page presents the key areas of the report, and the entire publication is a multi-page download that goes into more depth on the topic of corporate sustainability.