Croatia

Embrace Life. Vipnet

CroatiaThe Croatian segment continued its positive operating development in the year under review thanks to sustained fixed-line growth and stronger mobile trends. On the other hand, regulatory pressure remained in the form of high frequency usage fees. The mobile business has benefited from the push towards higher tariffs since May 2015 and the continuous rise in the proportion of contract customers as a result. The fixed-line business continued to grow as a result of the increased sales focus on broadband and TV services.

The fixed-line business segment will be further strengthened following the closing of the acquisition of Metronet, which is expected for the first quarter of 2017. The company is expected to be consolidated in the first quarter of 2017.

The total number of wireless subscribers fell by 0.8% to around 1.72 million in the year under review. The proportion of contract customers increased to 49.2% over the course of the year (2015: 48.2%). The market share increased slightly from 36.0% in the previous year to 36.1% in the year under review. In the fixed-line business, the number of revenue generating units (RGUs) increased by 12.1% to 620,100, with growth of 17.1% in broadband RGUs and 7.2% in TV RGUs.

Vipnet recorded total revenue growth of 7.0% in the year under review (reported: +8.6%). Service revenues rose on the back of the strong growth in fixed-line RGUs as well as higher fixed fees in the mobile business following the aforementioned push towards higher-value tariffs. Equipment revenues also rose as a result of more handsets sold and the higher subsidy level. Average monthly revenue per user (ARPU) increased from EUR 11.5 in the previous year to EUR 11.9 in the year under review. This was due to the higher contract customer ARPU in the wake of the aforementioned migration to higher-value tariffs.

Average monthly revenue per fixed line (ARPL) remained almost stable on a reported basis at EUR 23.6. On a reported basis, the higher number of revenue generating units (RGUs) and the stable ARPL meant that fixed-line service revenues increased by 24.5% compared with the previous year.