Crnogorski Telekom

Crnogorski Telekom announces the 2009 business and financial results

25.02.2010.

In the reported period, Crnogorski Telekom primarily focused on expanding the broadband services in both fixed and mobile segments and on the stabilization in the field of voice services. The CT’s total revenues reached EUR 122.9 mil.

On today’s press conference, financial and business results of Crnogorski Telekom for the year 2009 were presented. Revenues of Crnogorski Telekom for the year 2009 amounted to EUR 122.9 million, a decrease of 7.2% on YOY comparison. Revenues of fixed line services business achieved EUR 71.7 million, decrease of (5.7%) YOY, and revenues of mobile services business amounted to EUR 65.1 million, decreasing (9.9%). By this development, CT follows the international industry trend. The successful implementation of a cost efficiency program in 2009 resulted in YOY cost reduction of EUR 7.6 million* (9.0%).

EBITDA* in total decreased by 3.9% YOY, to EUR 45.6 million. The decline in fixed line business reached 5%. EBITDA* in mobile services decreased by 2.7%. Operating income (EBIT) and Net income developed positively and increased by 23.1% and 16.1% respectively, mainly due to one-off items.

T-Com revenues decreased by EUR 4,3 million or by 5.7%. Major contributors to this development are voice revenues, both retail (EUR -2,6 million; -8.0%) and wholesale (EUR -3,9 million; -17.0%). Decrease of customer figures and usage are causing voice retail revenues decrease, while decreased traffic volumes (mainly of transit traffic) are the reason for voice wholesale revenues decrease YoY. There is a moderate Fixed line customer churn 4.1 th (2.4%). CT Fixed line revenues and customers development is far better than the international trend.

Broadband/Internet revenues continued to increase significantly. ADSL revenues increased significantly YoY (EUR 2,6 million; 48.0%) driven by customer base increase of 15.7 th; 56.2%. IPTV revenues increased by 24.0%, mainly due to customer increase effect 12.4 th YOY; 70.7%. Based on the cost efficiency project , OPEX* decrease of EUR 3.1 million (-6.0%) YOY could only partially compensate the revenue decline. Therefore EBITDA decreased by 5.0% YoY to EUR 23.7 million.

Revenues of T-Mobile CG for the year 2009 amounted to EUR 65.1 million and compared to the same period of 2008 decreased by 9.9%. This trend is primarily the result of the continuing decrease of voice revenues as result of intensive competition and economic crisis. Another driver was significant decrease of visitors revenues (YoY decrease EUR 2.9 million, -36%). EBITDA* for the year 2009 decreased by 2.7% to EUR 21.9 million.

By YE 2009, 474.5 ths (+12.4% YOY) customers used T-Mobile CG services. In this period, the customer number growth compared to last year mainly was driven by gain in postpaid segment. Trend in the 2009 was the gradual reduction of prices of calls and services. Customers could enjoy more call minutes, messages or data, which was demonstrated in the significant traffic growth as well as higher discounts. It resulted in the Average Revenues per User (ARPU) decrease, compared to the last year to amount of EUR 8.8 (-24.5%) YOY.

Mr. Daniel Szasz, Chairman of the Board of Directors and Chairman of the Management Committee of Crnogorski Telekom commented: "The year 2009 was financially and operationally very challenging, therefore the operational results are lower compared to 2008, but are in line with expectations. In fixed line segment, our constant focus on the expansion of ADSL services has been proven by 56% growth in the number of accesses in this segment. At the same time, the number of EXTRA TV customers increased by more than 70%. At the beginning of Q4 2009 we launched Triple Play packages combining core services: Broadband-Internet, TV and Voice, and the first results are very positive. In mobile segment, our Pleme youth offer was a great success, we presented breakthrough devices such as iPhone 3G and iPhone 3G S for the first time to the Montenegrin market; we continued the expansion of mobile internet, thanks to the continuous improvements in our offer in order to satisfy our customers’ needs for higher bandwidth and more powerful data devices. We improved our market position, in both prepaid and postpaid segment, which shows that our strategy in offering superior network quality, tailor made-tariffs and innovative devices has proven to be right. In 2010, despite the macroeconomic and market challenges that are ahead, we will keep our customer focus and continue with investments that should improve the quality of our services and our customers’ satisfaction.

Mr. Manfred Knapp, Chief Financial Officer of Crnogorski Telekom commented the financial results of the company: “Revenues of Crnogorski Telekom are affected by the fact that it operates in a market characterized by the gradual decrease of customer demand in fixed voice services, high level of saturation in the mobile voice services and the continuing interest of customers in broadband services. Due to the strong pressure on prices in the telecommunications business, average revenues per customer have decreased too. Nevertheless, due to the ongoing multi-year company’s program aimed at increasing efficiency, we managed to partially offset the revenue drop. Taking into account the current market trends and the macroeconomic situation in the country, we will continue with our efforts in improving cost efficiency in 2010 as well. “

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