A1 Telekom Austria

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In 2015, competition on the Austrian mobile communications market intensified with the entry of additional mobile virtual network operators (MVNOs) particularly in the no-frills and SIM-only business. Against this backdrop, A1 Telekom Austria AG succeeded in safeguarding the premium customer business against new competitors by means of higher handset subsidies and increased data volumes included and bandwidths. In the no-frills segment, A1 Telekom Austria AG was also able to maintain its competitiveness thanks to price adjustments next to increased data volumes included.

Convergent product bundles remained a key element of the operating strategy in 2015. In its fixed-line business, the company also focused increasingly on the development of broadband capacities and services in the year under review, with the aim of meeting the rising demand for data. Against this backdrop, A1 Telekom Austria AG started to invest even more in the accelerated rollout of the Austrian fibre network in 2015. The company plans to spend around EUR 400 mn in total between 2015 and 2018 in addition to regular capital expenditure. This plan is subject to the announced government broadband subsidy programme as well as annual budget approvals by the Supervisory Board. In 2015 the rollout concentrated on not subsidised projects as the broadband subsidy programme was not approved until 22 December 2015.

In the year under review, A1 Telekom Austria AG reported a slight rise in the number of mobile communications customers by 0.6% to around 5.5 million. This was driven by a lower churn rate and higher gross additions. Nevertheless, the market share in mobile communications fell from 41.1% in the previous year to 39.5% in the year under review. The proportion of contract customers dropped from 70.2% in the previous year to 68.3% in the year under review. The number of fixed access lines rose slightly by 3,500 lines to nearly 2.3 million lines year-on-year. Fixed broadband and A1 TV enjoyed considerable year-on-year growth of 4.4% and 7.0% to more than 1.5 million and 269,400 customers respectively. Growth in fixed broadband lines was particularly driven by the increasing demand for the 16 and 30 Mbps products. These positive developments were offset by another decline in fixedline voice minutes by 10.0% (2014: –12.8%).

On the revenue side, the Austrian segment reported growth of 2.2% to EUR 2,526.7 mn in 2015. In the fourth quarter of 2015, the positions monthly fee and traffic revenues (in the fixed-line business) as well as wholesale (incl. roaming) included positive extraordinary effects of EUR 10.5 mn. In the second quarter of 2014, results included negative extraordinary effects in the revenue positions monthly fee and traffic revenues as well as in data and ICT solutions. There were also positive extraordinary effects in the revenue positions wholesale (incl. roaming) and other revenues. In total a negative effect of EUR 28.2 mn was booked. A revenue growth of 0.6% could be generated, also when adjusted for the extraordinary effects. The jump in gross additions in mobile communications as well as lower retention subsidies in combination with a stable number of replaced handsets led to revenue growth from the sale of handsets. Wholesale revenues also showed growth adjusted for the one-off effects, which is attributable to higher income from satellite solutions and visitor roaming revenues. The adjusted decline in monthly fee and traffic revenues and lower interconnection revenue somewhat weakened the overall increase. Lower revenues from mobile data tariffs and in the no-frills business as well as stable premium customer revenues led overall to lower ARPU relevant revenues. Declining voice minutes continued to negatively impact fixed-line revenues, but were partly compensated by gains in broadband and TV.

Average monthly revenue per mobile user (ARPU) dropped from EUR 16.2 to EUR 15.9 in the year under review. This was attributable to a change in the calculation method of ARPU as value-added services were no longer included. Given the further decline in the fixed-line voice business, which was only partially mitigated by higher revenues from broadband and A1 TV, average monthly revenue per fixed access line (ARPL) fell to EUR 29.6 in the year under review (2014: EUR 30.4). Adjusted for the above-mentioned
extraordinary effect, ARPL declined by 3.2% to EUR 29.5.