O2 Czech Republic reported revenues for the first half of 2014 of CZK 21.773 billion, down 8.9 percent from a year earlier. Excluding cuts to mobile termination rates, the operator said revenues would have fallen 6.1 percent. Revenues in the Czech fixed market fell 5.1 percent to CZK 9.667 billion, and Czech mobile revenues were down 15.9 percent to CZK 9.447 billion, while O2 Slovakia grew revenues 0.8 percent to EUR 104 million.
Despite an 11 percent annual reduction in headcount, group OIBDA was still down 12 percent to CZK 7.581 billion, giving a margin of 34.8 percent. The acquisition of additional spectrum in both countries led to an increase in capex to CZK 5.546 billion. Excluding the new licence, capex was down 25.7 percent to CZK 1.637 billion, and free cash flow fell 24.8 percent to CZK 3.492 billion.
In the Czech Republic, mobile service revenue fell 15.5 percent to CZK 8.724 billion, hurt by the MTR cuts, competitive pressure and a drop in voice and SMS revenue. Non-SMS data revenue was up 25.6 percent year-on-year, and smartphone penetration improved 7.7 percent points over the same period to 38.1 percent at the end of June. O2 still lost 42,000 mobile customers in the period, for a total 5.060 million. Contract customers were up 2.5 percent year-on-year to 3.253 million, while contract ARPU fell 15.8 percent to CZK 379. The prepaid base dropped by 5.3 percent to 1.807 million, due to migration to postpaid and MVNOs.
In the fixed market, the Czech operator lost another 52,000 lines in the first half, for a total 1.337 million. Of the 914,000 broadband customers at the end of June, 391,000 were on VDSL, up 26 percent from a year earlier. TV customers grew 20 percent year-on-year to 171,000.
O2 Slovakia added almost 69,000 new customers in the first half for a total 1.608 million, up 12.6 percent from a year earlier. The postpaid base rose by 47,000 in the six months to 821,000 at the end of June. Excluding the termination rate cuts, the operator's revenues were up 14.0 percent. OIBDA rose 8.3 percent to EUR 34 million, driven by a focus on higher-value customers and new price plans. ARPU totalled EUR 8.9 in the first half, with EUR 13.3 for postpaid and EUR 6.0 for prepaid.
