T-Mobile NL in Q3: business market and cash flow improve

Thursday 8 November 2012 | 17:01 CET | Background

T-Mobile Netherlands won 17,000 new subscribers in the third quarter. That included a gain of 34,000 postpaid customers and a loss of 17,000 prepaid users. This was an improvement on the previous three quarters, when the mobile operator lost customers. At the same time, net additions were much higher in the year-earlier period, at 105,000. It now counts a total 4.761 million customers, of which 36 percent prepaid (42% a year ago). On the fixed-line market, it continued to lose subscribers, shedding another 1,000 broadband users for a total 280,000.

While mobile data use continued to grow, revenues from voice and SMS were down due to respectively regulation and lower volumes (one can assume due to competition from free alternatives such as WhastApp). Voice usage fell to an average 129 minutes per subscriber in Q3 (184 for postpaid), from 138 minutes (201 postpaid) in the last quarter. Data growth is also slowing considerably, from 119 percent in Q2 2011 to 47 percent in the past quarter. 

All of this led to a small drop in the ARPU to EUR 24, according to T-Mobile. Our calculations give a figure of EUR 23.99 versus EUR 24.44 a year ago. In postpaid, the figure fell from a rounded EUR 38 to EUR 34, while prepaid improved to EUR 6 from EUR 5. Subscriber acquisition and retention costs were respectively EUR 96 (+19%) and EUR 159 (unchanged) per subscriber.

Total mobile service revenues came in at EUR 342 million, down 4.5 percent, while total revenues reached EUR 413 million, down 3.5 percent. On the consumer market (including fixed), revenues fell 3.6 percent to EUR 325 million, while business revenues (including M2M) grew 4.2 percent to EUR 75 million. The remaining revenues (wholesale, etc.) were down 32 percent to EUR 13 million.

EBITDA totaled EUR 143 million, an increase of 18 percent thanks to lower costs for a number of items:

  • Interconnection. For the same reason revenues were lower: regulation and lower volumes.
  • Subsidies. The average SAC increased, but the number of gross additions was higher in the year-earlier quarter. 
  • Personnel and material. Likely the result of efficiency measures. 
Capital expenditure was EUR 22 million, down 31 percent. Free cash flow (EBITDA minus capex) rose as a result by 36 percent to EUR 121 million.

To finish we note that T-Mobile has still not taken a decision on the future of its fixed-line activities (T-Mobile Online), apart from putting its focus on mobile and no longer investing in the development of new fixed services. 

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