T-Mobile CR, the No.2 domestic mobile operator, reported its Q1 2004 results yesterday. Sales increased by almost 8% y-o-y in line with our estimate, as the growth in its client base on the nearly saturated market still more than offsets the ARPU decline (to CZK 452 from CZK 472 in Q1 2003) - mostly a reflection of intensifying competitive pressures on effective tariffs. Contrary to our expectations, EBITDA declined y-o-y as the EBITDA margin fell by 4% y-o-y to 45.6%, reducing the effect of the rising sales on EBITDA. T-Mobile CR’s net profit of CZK 1.04bn remained flat y-o-y and thus stood significantly below our estimate; the company did not disclose more detailed figures, thus not allowing us to elaborate on the difference.
České radiokomunikace holds a 39% stake in T-Mobile CR, which is its most valuable asset.
GER GAAP, CZKm Q1 2004 Q1 2003 Change
Sales 6,125 5,692 7.6%
EBITDA 2,775 2,833 -2.0%
Net profit 1,040 1,038 0.2%
Custom.mil.peop. 3.99 3.55 12.4%
While T-Mobile CR gained 43,000 new customers in Q1, Eurotel, Cesky Telecom's 100%-owned subsidiary, registered 4.28m users at the end of March, an increase of 69,000; Cesky Mobil, the No.3 domestic mobile operator, had 1.61m clients after adding 67,000 new customers. The mobile penetration rate exceeded 96% in March 2004.