T-Mobile Poland's performance in 2022. Customers choose T-MOBILE – almost 1 million new customers in a year

In 2022, T-Mobile Poland:

• improved key operational and financial indicators, including a 2.1% (y/y) increase in revenues;
• which allowed to partially offset the considerable increase in costs, especially energy, particularly in the fourth quarter of the year. The final EBITDA AL achieved was 0.9% higher than the year before;
• accomplished growth in spite of the increasingly difficult environment, thanks to very good commercial results: growing sales of convergent services and acquiring almost 1 million mobile customers and achieving the best MNP result among Polish MNOs, as well as exceeding 154,000 broadband customers and successfully acquiring business customers;
• undertook extensive activities for the benefit of people affected by the war in Ukraine, including the SIM card distribution at the border and cooperation with aid organizations;
• continued its efforts to continuously improve the quality of its own mobile and fiber infrastructure as well as the FTTH footprint.

Throughout 2022, T-Mobile acquired 970,000 new customers, surpassing the 12.5 million active SIM cards at the end of the fourth quarter of the year. As for the contract segment, the net additions ratio for the year was 225,000, an 11,4% increase compared to last year. This was possible both due to an increase in the number of customers acquired from competing operators - T-Mobile was the only one of the four largest operators in Poland to end the year with a positive net result, with a balance of 64,000 - and by maintaining high level of contract customer loyalty (average monthly churn rate of 0.7). In turn, the result of the prepaid segment resulted from organic growth as well as the great reception of the distribution of SIM Cards to help refugees from Ukraine.

The market also very positively reacted to the addition of linear TV to the offer, which had a positive impact on sales of fiber services. At the end of the year, T-Mobile had coverage of 5.6 million households, which represented almost 40% of the total number of households nationwide. At the end of the year, the number of the operator's fixed broadband customers exceeded 154,000. Notably, the greater number of offered services translated into an increase in the number of customers choosing more than one service from T-Mobile's offer. The consequence of this, combined with an increase in sales of unlimited tariff variants and the number of devices sold in the operator's network - was an increase in revenue, which grew by 2.1% year on year, reaching PLN 6.6 billion.

2022 was definitely a year in which we have successfully competed for customers. We are delighted to have gained almost one million new customers and to have won the MNP ranking. This is certainly thanks to the launch of a full, convergent offer for the whole family, but also - we see this clearly in our conversations with customers - because of the highest quality of service and support, and because we address their real needs accurately. We are grateful for their trust and we will continue doing everything to make them 100% satisfied with our services - said Andreas Maierhofer, CEO of T-Mobile Poland. - However, from a financial point of view, the subsequent months of the year were increasingly challenging. Rising prices, particularly for energy which is the one of main costs of operation for any technology company, posed a serious challenge to our growth plans. Nevertheless, thanks to the consistent implementation of our strategy and the increase in sales and customer base, we were also able to meet our financial assumptions in full.

 

 

On a year-over-year basis, the cost of energy used by T-Mobile Poland increased by almost PLN 100 million compared to 2021, an increase of 70%. In the fourth quarter alone, electricity expenses were higher by more than 140% compared to the corresponding quarter of the previous year. This, combined with rising land lease and retail rental costs of the operator's shops, limited the translation of revenue growth into EBITDA AL, which for the 12 months of the year amounted to PLN 1.77 billion, up 0.9% (y-o-y). However, in the fourth quarter of the year, which in which the negative influence of increased operating costs was the largest, it translated into a decline in quarterly EBITDA AL by (-)4.3%.

In terms of responsible business T-Mobile activities last year were focused on supporting those affected by the war in Ukraine. The operator very quickly launched coordinated aid program aimed primarily at providing connectivity and access to information free of charge to all those who need it. The company supported the Polish Red Cross, the Polish Centre for International Aid, and a number of other organizations to which it provided phones, SIM cards, routers and tablets. In the following months, the company supported the Ukrainian community in Lublin by donating thousands of meals for persons in need, providing shelters with TV and internet access, financing thousands of school sets for children and covering costs of renumeration for Ukrainian teachers. T-Mobile also got involved in the #LiftUkraine action by financing transport of refugees to Germany and supported the Happy Kids Foundation, which has been fighting for equal opportunities for children, also from Ukraine, for years and during the crisis ran the largest center in Poland accommodating children from Ukrainian orphanages

In recent years, we have focused on improving the company's inner workings from market strategy and its implementation to financial stability. We have been doing so not only to achieve better growth but also to be ready for the time of economic downturn, which, we must face at the moment - said Juraj Andras, CFO of T-Mobile Polska. It is this healthy financial condition of the company that has allowed us to largely offset additional expenses, 80% of which are energy costs, and combined with a very good commercial result to report year-end increases in EBITDA AL, in line with our growth strategy.

 

A year of focusing on the customer and convergent services

T-Mobile’s activities in the B2C area have focused on positive customer experience in both customer service quality and the proposed offers. In the first weeks of the year, the operator was the first in the Polish market to implement tariffs which are unlimited in terms of both speed and data, with these types of tariffs making up a large share of contracts sold overall.

In the second quarter, T-Mobile introduced linear TV to its offer, becoming the fully convergent operator. As part of the Magenta Dom offer, the operator once again focused on removing obstacles from the customers’ lives, providing them with a simple and flexible service package. The increase in T-Mobile’s TV offer between the 3rd and 4th quarters was 15%, and the fiber sales in 2022, compared to 2021, rose by as much as 44%. Equally important is that by the end of 2022, on average, every second client looking to buy fiber from T-Mobile decided on a contract which also included TV or TV and voice services.

Growth in the business segment

T-Mobile recorded a positive balance of number portability not only within the private segment, but also in the business, where MagentaBIZNES tariffs had been increasing in popularity with each quarter. Throughout the year, Magenta BIZNES customers increasingly opted for higher, unlimited, tariff variants - particularly L and VIP - and were progressively willing to go for fiber internet service.

On the other hand, in term of the largest companies, in addition to growth in connectivity, T-Mobile recorded a substantial increase in interest concerning security services (revenue growth of 60% over the year) and cloud services (revenue growth of 20%). These trends were certainly a response to global events - the popularization of the remote or hybrid working model and the increase in cyber security threats associated with the outbreak of war in Ukraine. To meet customer needs, the operator developed its product portfolio in these areas to launch Disaster Recovery as a Service and Workspace as a service. In addition, T-Mobile developed its proprietary CyberGuard solution with new functionalities.

Appreciating the wide choice and quality of business services offered by T-Mobile, the most demanding business customers were increasingly willing to choose the operator's products. In 2022, the company won a number of contracts, including in the public sector with customers such as the Supreme Administrative Court, the Central IT Centre, the Ministry of Family and Social Policy, the Ministry of the Interior and Administration; PKP Intercity; the Agency for Restructuring and Modernization of Agriculture, the Institute of Meteorology and Water Management, the Supreme Chamber of Control, and the Office of Technical Inspection. In November, T-Mobile and T-Systems were awarded the Commercial Partner of the Year award in EMEA Central by Cisco.

The best network quality

Throughout 2022, T-Mobile continued its network investments to ensure that its customers receive the highest quality of service even in the face of rapidly growing data demand. During those 12 months, the volume of data transferred on the operator's mobile network increased by 28% and the proportion of voice calls made using VoWIFI and VoLTE technologies exceeded 60%. The operator also carried out investments aimed at the expanding the 5G network on currently held frequencies and prepared the infrastructure for the rollout of the fifth-generation network on 3.5GHz bands. Currently, the 5G signal is available on almost half of the base stations forming T-Mobile's network coverage. In order to improve the management of frequency resources, the company continued the process of shutting down the 3G network in order to allocate the 900MHz band for the construction of newer generation networks and, in view of the favorable results, decided to accelerate the project schedule. Currently, the third-generation network is to be switched off in April 2023. The project to produce electricity through the installation of photovoltaic panels on base stations also continued. To date, these have produced almost 0.5 gigawatt of energy.

The operator has also consistently expanded its own fiber-optic network, which is used to transmit data on the operator's own network, also connecting Data Centre facilities and base stations of T-Mobile. Also on their basis, the operator provides services to business customers.

All these activities have translated into achieving the highest network quality. In 2022, T-Mobile was awarded first place for download speeds in mobile and home internet by SpeedTest.pl and in the 4G/LTE download category by RFBENCHMARK.

Responsible business

The year 2022 marked a strong shift towards the ESG perspective in the responsible business strategy. The company pursued initiatives in the areas of environment, social and governance, with a consistent drive towards its goals.

The most ambitious ones relate to the environmental area and zero emissions, which the company wants to achieve as early as 2025 in terms of indirect and direct emissions. The fact that already 100% of the energy consumed by T-Mobile comes from renewable sources should be considered a success. The company is continuously modernizing its vehicle fleet and investing in the construction of photovoltaic installations. The operator has also inaugurated the 'Planet Matters' campaign in 2022, which aims to educate people about the proper recycling of old devices and encourage customers to return unused phones.

Digital responsibility is another extremely important area of the company's activities. In 2022, T-Mobile continued the "On the Winning Position" project aimed at young people. Based on its collaboration with popular internet creators, T-Mobile addressed the topic of hegemony and self-acceptance online. In addition, the company continued its commitment to helping seniors and implemented the next instalment of the 'Network of Generations' initiative, in which it donated computer equipment to 20 nursing homes and provided free training in the use of technology for the elderly. 

T-Mobile Poland published a corporate social responsibility report for the third time in 2022. The material was presented in an online format. The report issued by T-Mobile presented the company's commitment to the development of sustainable business. The report was prepared in accordance with the Global Reporting Initiative GRI Standards and was externally verified by an independent auditing company. An electronic version of the report is available at www.raport-t-mobile-polska.pl.