Republic of Macedonia

one.Vip

Vip operator

In 2017, performance in the Macedonian segment continued to be characterised by intense competition. Both the private customer and business customer sectors experienced a challenging competitive environment. Customer retention was the biggest challenge for all market players. In the fixed-line market, customers are leaning towards multiple-play offers rather than maintaining multiple single-play subscriptions. This increases the competitive advantage of convergent operators such as one.Vip. In order to profit from the demand for data and attract a larger number of customers with broadband products, one.Vip introduced Wi-Fi routers in May 2017.

In the year under review, one.Vip's mobile customer base declined by 2.8 % year-on-year as customers continued to move from multiple prepaid to single contract subscriptions.

In the fixed-line business, the number of revenue-generating units (RGU) increased by 8.4 % compared with the previous year. The RGU growth was driven by strong demand for convergent packages.

Total revenues decreased by 4.5 % year-on-year, mostly due to a decline in interconnection revenues stemming from a mobile termination rate cut as well as lower transit revenues in the fixed-line segment.

Costs and expenses decreased by 10.0 % year-on-year. The decline was attributable to lower interconnection expenses due to a termination rate cut as well as cost savings on account of the synergies created following the merger with ONE.

Overall, the decrease in total revenues was more than offset by lower total costs and expenses, and in 2017 EBITDA increased by 15.0 % year-on-year. Depreciation and amortisation declined by 35.3 % year-on-year due to the depreciation that resulted from the merger in the previous year. Overall, the negative operational results improved from EUR –29.5 mn in 2016 to EUR –6.0 mn in 2017.