18.2.2020
A year marked by record investments in fiber and mobile network modernization supported by solid financial position
- Highest investments in the last 10 years
- Successfully completed the modernization of our mobile network – now fully 5G ready
- More than doubled fiber rollout vs. the previous year, improving fixed network and making significant progress with penetration of fiber speeds
- Substantially reduced customer complaints and waste calls to residential and business call centre agents while also reducing number of technical faults
- Significantly increased adoption of Group’s digital channels and delivered increase in number of Magenta 1 users
- Growth in Mobile, TV and System Solutions almost offset revenue decline following exit from Energy business and Fixed voice decline
- As a part of four-year Share Buyback (SBB) programme launched in June 2017, acquired 453,318 Company shares in the amount of HRK 73 million
Hrvatski Telekom, the leading telecommunications provider in Croatia, announces its unaudited consolidated results for the year ended 31 December 2019.
Total consolidated net revenue decreased by HRK 79 million or 1.0% yoy to HRK 7,704 million in 2019. Within this, revenue growth was achieved in Mobile Telecommunications, TV and System Solutions.
EBITDA before exceptional items after leases (EBITDA AL) in 2019 amounted to HRK 2,908 million and is 4.1% lower compared to FY 2018, mainly due to increased material, roaming and personnel costs. A high EBITDA AL margin was maintained at 37.7%.
In 2019, Hrvatski Telekom invested HRK 1,9 billion in infrastructure and development of innovative services, which is a 4.1% increase over the previous year.
Strong investments as a basis for digitalisation and future growth
Hrvatski Telekom continued its capital investments in mobile and fixed broadband networks with the goal of ensuring technology to every corner of Croatia so that all citizens have an equal opportunity for a quality life.
By the end of 2019, the radio access network modernization program was successfully completed. Radio equipment was swapped in 1,960 location and in addition 1,469 rooftop antenna poles and antenna masts have been upgraded or replaced. The modernization has enabled almost all HT mobile locations to be equipped with LTE (98%) which provides 3 times greater capacity and 75% of higher user throughput compared to network capacity before modernization.
Beside 4G performance improvement, modernization established the prerequisites for successful 5G network introduction.
In the mobile network, "indoor" 4G population coverage is 89.1% and “outdoor “coverage reached 99.4%. Implementation of 4G speed increase continued allows user throughput up to 350 Mbps for the 79% of population and speeds up to 300 Mbps for 6% of population.
As first operator in Croatia and in the region, HT established pilot 5G network which has been integrated into a real network environment. In 2019 in total 19 base station were implemented out of which 9 in Q4, including building of Croatian presidency of the EU Council. The pilot network will be used in 2020 for the testing purpose and demo cases showing the practical usage of 5G networks. We are the first in the Croatian market to launch a test 5G station in Samobor, and we have several test 5G locations across the country.
In 2019, the modernization and implementation of the fixed access network of new generation (NGA) has been focused on the fiber optic networks achieving realization of an additional 50,100 HH covered by FTTH technology in Q4. Total coverage with Fiber to the Home (FTTH) technology increased to 280,358 households. In addition, during 2019 intensive activities on Hybrid access were undertaken for the customers out of reach of the high speed fixed network. In total 110,356 customers were upgraded on higher speeds through Hybrid access at the end of 2019.
In total, HT achieved coverage available for 60.2% households with technologies that enable speed >30 Mbps from which 23.6% with technologies that enable speed >100 Mbp. The optical based access network (FTTx) is available for 438 thousand households.
Focus on customer centric culture, reduction of customer complaints
During 2019 we have substantially reduced customer complaints and wasted calls to our residential and business call centre agents while also reducing the number of technical faults. More precisely, in total customer complaints were down 22% comparing the same period last year due to proactive approach (e.g. process fixes, unified order form, proactive informing).
Growth of digital channels, further increase in the number of Magenta 1 users
The key lever for digitalizing customer experience is Hrvatski Telekom’s application My Telecom, which gives customers a detailed overview of all telecommunications services in the fixed and mobile networks and their consumption, enables payment of bills, simple activation of e-bills and tariff plans and options management, and enables viewing of internet availability through an interactive map. The use of the My Telecom application is growing strongly and, at the end of December, it had more than 370 thousand users (32% of the base).
The number of users of the unique concept of converged offering, Magenta 1, continues to grow, with 244,000 households (4Q 2018: 191,000) and 31,000 business users today (4Q 2018: 21,000).
Capital allocation
During 2019 the Company acquired at Zagreb Stock Exchange further 453,318 Company shares, representing 0.6% of the Company’s issued share capital, i.e. HT holds in total 453,318 Company shares as at 31 December 2019. For the acquisition of Company shares in 2019, the Company paid out an equivalent value of HRK 73 million.
The Programme is running alongside the Company’s regular dividend policy, providing clear evidence of the Company’s intention to transfer value to its shareholders.
HT will publish dividend proposal on 12 March 2020, together with audited annual results.
Within the strategy of restructuring non-core parts of HT’s business operations, in November 2019 a Contract was concluded with Uniline d.o.o. on transfer and sale of the share held by HT holding d.o.o. in the company E-tours d.o.o. The transaction closed on 31 December 2019.
Commenting on the business results for 2019, Konstantinos Nempis, CEO of Hrvatski Telekom, stated: "As the largest private investor in the digitalization of Croatia, we continue with bringing technology to every corner of Croatia to ensure equal opportunity for a quality life to all of our citizens. We invested the biggest amount of CAPEX in the last 10 years progressively turning around our service revenues, by increasing BB and TV customer bases and increasing mobile ARPUs via more for more propositions. The investment in our mobile network has enabled us to triple the capacity of the network and increased the user speed by 75% compared to the pre-modernization status. We achieved availability of 4G mobile network service in the entire Croatian territory, hence created infrastructure preconditions for rural development but also provided sufficient capacity during tourist season. Furthermore, the new, modernized equipment is “5G ready”. I’m also proud on our Partnership Agreements with local and regional governments in which we committed to develop optics for 135,000 customers across Croatia. All of this is a crucial basis for connecting everyone in Croatia to the opportunities of digitization. And I can promise you, we will not stop until everyone in Croatia is connected."