Despite a slight decline of financial indicators, investments in fiber and mobile network modernization continue
- Good performance in Mobile and System Solutions almost offset revenue decline following exit from Energy business and Fixed voice decline
- 40,000 new households covered by FTTH technology in Jan-Sep 2019 – 2.5 fold increase vs Jan-Sep 2018
- With its innovative hybrid approach, Hrvatski Telekom delivers high speeds of up to 30 megabits per second into rural areas of Croatia as well
- Increase in the number of Magenta 1 users and My Telecom application
- Expansion of the biggest data center in Selska street in Zagreb and implementation of the advanced cloud platform, Azure Stack
Hrvatski Telekom (Reuters: HT.ZA, Bloomberg: HT CZ), the leading telecommunications provider in Croatia, announces its unaudited consolidated results for the first nine months of 2019.
Consolidated revenues in the first nine months of 2019 were generated in the amount of HRK 5,713 million and are 1.3% lower compared to the same period last year. Within this, revenue growth was achieved in Mobile Telecommunications, Broadband and TV and System Solutions.
EBITDA before exceptional items after leases (EBITDA AL) in the first nine months of 2019 amounted to HRK 2,238 million and is 4.8% lower compared to the same period last year, mainly due to increased material and roaming costs and personnel costs. A high EBITDA AL margin was maintained at 39.2%.
Net profit after minority interests amounted to HRK 677 million and is 18.3% lower compared to the same period of 2018. This is a result of the EBITDA AL performance and the increased cost of depreciation and exceptional items.
Further investment in infrastructure, high-speed thanks to innovative hybrid technology
Hrvatski Telekom continued its capital investments in mobile and fixed broadband networks with the goal of ensuring superior customer experience and maintaining leading market position.
Optical Access Network (FTTx) is available for 428,000 households. 40,000 new households were covered by Fiber to the Home (FTTH) technology in the period from January to September 2019, which is a 2.5-fold increase vs. the period from January to September 2018. The total coverage by FTTH technology increased to 270,000 households.
In the mobile segment, the overall HT’s 4G network reached 99% population coverage outdoors and 87% population coverage indoors. Also, Hrvatski Telekom has continued with its significant investment program of modernizing the mobile network across Croatia. In the period from January to September 2019, additional 537 mobile locations have been equipped with “four carrier aggregation” configuration, thus increasing Gigabit capable LTE population coverage from 40% to 53%, as well as increasing 4G network capacities to successfully meet the increasing demands for data services, especially in the tourist areas of Croatia. Compared to the previous year’s tourist season, mobile data volume in the busiest week in HT network increased by 78%. In parallel, average download speed increased by 40%, from 43 Mbps to 60 Mbps, confirmed by Ookla measurements. Currently, 85% of the entire network has been modernized, and by the end of this year modernization will be completed, and the network will be fully ready for the implementation of 5G technology.
Thanks to the innovative hybrid technology, Hrvatski Telekom has provided access to high speeds of up to 30 megabits per second in rural and less populated areas of Croatia. It is a combination of the most affordable fixed and the best mobile network in a single service that provides stable and fast internet access. Thus, internet service users will have access to 50 percent faster speeds through this technology and will be able to enjoy the best television content provided by Hrvatski Telekom's IPTV service. 49,000 new Hybrid access customers were added in the period from January to September 2019 and 82,000 customers now enjoy the benefits of this innovative technology on the Croatian market.
In the first nine months of 2019, Hrvatski Telekom invested HRK 1,086 million, mostly in the modernization of infrastructure for fixed and mobile networks. Compared to the same period last year, investment is lower because of seasonal fluctuations, while the outlook for capital investment for the whole of 2019 remains the same as announced, at approximately the 2018 level.
Further increase in the number of Magenta 1 users and My Telecom application
The number of users of the unique concept of converged offering, Magenta 1, continues to grow, with 239,000 households and 30,000 business users today.
The key lever for digitalizing customer experience is Hrvatski Telekom’s application My Telecom that 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 September, it had around 338 thousand users.
Continued digitalization of Croatian society
Hrvatski Telekom has finished an upgrade of its biggest data center in Selska street in Zagreb and additionally expanded its data center services portfolio. As the first in Croatia, Hrvatski Telekom implements Azure Stack, the most popular public cloud platform, offering a wide range of advanced functionalities and tools. Azure Stack enables faster business operations and respective savings of time and funds, and enables data storage in Croatia, with certified local support. In this way, HT is implementing the digitalization of Croatia, by offering to its customers advanced tools, services and finished solutions in its partnership with Microsoft and Combis.
Commenting on the business results for the first nine months of 2019, Konstantinos Nempis, CEO of Hrvatski Telekom, stated: "As the largest private investor in the digitalization of Croatia, we continue our activities by bringing technology to every corner of Croatia so that all citizens have an equal opportunity for a quality life. At the same time, we are contributing to the Croatian economy thanks to a strong investment cycle and digital transformation of the company. We are bringing our mobile network modernization project to a close, we invest heavily in optical infrastructure, and thanks to innovative hybrid technology, we provide users in all parts of the country with high-speed internet access, which means more opportunities for flexible work, entertainment, fast search for information, and communication. I am proud to be the head of a company that contributes directly to 3 percent of Croatia's GDP, and last year contributed directly and indirectly to HRK 11.3 billion in induced GDP, created 30.2 thousand jobs, and generated HRK 3.26 billion in taxes and contributions, as confirmed by the HT Group's Digital Atlas."