Czech mobile operators released information on their customer base for 1Q2006. Eurotel still leads with 4.70m customers, ahead of T-Mobile 4.65m and Vodafone 2.21m. However Vodafone has been a stellar performer in 1Q2006 gaining 73,000 new customers, up 3.46% q/q, while Eurotel gained only 19,000, up 0.54% q/q and T-Mobile 14,000, up 0.39% q/q. Total number of mobile phone customers increased by 1.02% q/q to 11.56m, implying penetration rate of 113%. Better performance of Vodafone was mainly due to Try Vodafone offer. Comparing ARPU of three mobile operators, Vodafone stands at first place with CZK 644, second Eurotel with CZK 506, and T-Mobile with CZK 470.
We believe Eurotel will retain its dominant edge in the market. Additionally, it is better positioned to offer convergent offerings to its subscribers and hence has better chances of retention whilst also driving value. We reiterate our Buy recommendation on Cesky Telecom.