- Substantial expansion of broadband Internet HD availability led to a 20 thousand year on year growth of the customer base. At the end of June 2019, in total 822 customers were subscribed to O2 broadband internet.
- For the first time in history, only the customers of O2 TV could watch all the matches of FORTUNA:LIGA, UEFA Champions League or domestic ice hockey league. Number of O2 TV monthly subscribers and those watching television on internet or via our application increased by 39% to 909 thousand active accesses helped also by a unique sport content.
- Consolidated revenue went up 2.1% year-on-year to CZK 19 billion in the first half of 2019, with growth reported both in the Czech Republic and Slovakia.
- Consolidated EBITDA grew by over 12% to CZK 6.1 billion. Higher investments in past years, which were directed mainly into the exclusive sport rights, further improvement of own network in Slovakia and IT transformation, led to a 6% decline in consolidated net income to CZK 2.6 billion.
"After a consistent long-term growth of the mobile services, we to reverse the trend also in the fixed services and we achieved growing broadband internet customer base, helping us to increase revenue across the entire fixed segment. Our unique movie and sport content in O2 TV continues to significantly contribute to the growth. Thus it became the one and only TV service in the Czech Republic, which offers such a wide and varied range of exclusive content,"comments Jindřich Fremuth, Chief Executive Officer and the Chairman of the Board of Directors of O2 Czech Republic on the results, and adds: "This also helped us to increase number of O2 TV customers by over 40 thousand and number of broadband Internet HD customers by close to 14 thousand in the first half of this year."
"Growing customer base has been already positively reflected in our revenue for the first half of 2019. While our operating profit EBITDA increased by over 12% year-on-year, higher investments last year led to an increase in depreciation and a year-on-year decline in the net profit," explains Tomáš Kouřil, the company's Chief Financial Officer and Vice-Chairman of the Board of Directors and adds: "The June Annual General Meeting approved the payment of a dividend and part of the share premium totalling CZK 21 per share. We thus offer our shareholders one of the highest returns in the telecommunications sector."
Overview of key events in the second quarter 2019
O2 started offering the fixed Internet connection EXKLUSIV HD to selected customers. It allows download speeds of up to 1,000 Mbps and uploads of up to 100 Mbps. The fastest fixed internet can also be purchased as part of the O2 Spolu bundled package. This new tariff can only be combined with the O2 Smart Box modem, which is technically tested for transmitting high speeds and is able to transfer the speed via cable to the home network or wirelessly via Wi-Fi.
As part of the C-Roads Czech Republic project, O2 introduced a mobile transport application and a vehicle unit. Thanks to this, cars can communicate not only with each other, but also with traffic signs, rail crossings, rescue system vehicles or traffic lights. The mobile app alerts drivers via a mobile phone or dashboard information panel about traffic hazards, an oncoming ambulance or a rail crossing through which a train will be passing through. The project aims to significantly increase road safety not only in the Czech Republic, but also within the European Union.
O2 continues preparations for the arrival of 5G. At the end of June, in Kolín, it introduced a real 5Gin a real environment. In addition to fast data transmission, it also provides a very short response time. The O2 5G network in Kolín has been tested together with CETIN and the equipment used is provided by Ericsson. The operator launched the technology at a leased test frequency of 3.5 GHz, complemented by Massive MIMO 64T64R and 256QAM technologies. Real-world experience will help selecting suppliers and develop countrywide coverage of fifth generation networks after the necessary frequency bands are auctioned.
Thanks to the successful proposition of O2 Spolu bundled packages and continuing popularity of O2 FREE and O2 Data tariffs, the total number of mobile registered customers  reached 5,597 thousand at the end of June 2019. The number of mobile contract customers was at 3,199 thousand, the number of mobile prepaid customers stood at 1,970 thousand, while the number of M2M services reached 429 thousand.
In O2 network, smartphones represent 74% of handsets and 62% of total handsets support LTE technology. The larger portion of data volumes included in FREE tariffs along with customers' interest in O2 Data tariffs with a monthly data volume of 4 to 20 GB and with an increase in the number of customers with a 4G LTE-enabled smartphone contributed to a 31% year-on-year increase in mobile data usage generated in handsets.
The number of O2 TV tariffs customers provided over O2 fixed line (IPTV) as well as over internet connection from any provider (OTT), reached 381 thousand as at 30 June 2019, including households subscribed for complementary MULTIservice, which enables customers to watch TV on multiple TV sets at once. During the first half of 2019, the number of O2 TV customers improved by 43 thousand. The opportunity to watch O2 TV content on the web or in mobile applications used in average close to 530 thousand viewers on a regular basis in the first half of 2019, including customers of O2 TV Sport Pack package. Thus, O2 registered over 900 thousand O2 TV active accesses  as at the end of June 2019.
Number of broadband internet customers  over cable as well as wireless technology reached in total 812 thousand as at 30 June 2019. During the first half of 2019, their number increased by 14 thousand.
O2 Slovakia keeps recording increasing demand for its O2
Pausal mobile tariffs portfolio. As at 30 June 2019, the
total active customer base reached 2,081
thousand. Contract base amounted to 1,330 thousand and it
represented 63.9% of total base, up by 2.9 percentage points
Total consolidated operating revenue reached CZK 18,989 million in the first half of 2019, up 2.1% year-on-year, with growing revenue in all segments. Operating revenue in the Czech Republic improved by 1.7% to CZK 15,364 million, thanks to the 2.6% growth in fixed revenue to CZK 5,449 million and a 1.1% year-on-year growth of mobile revenue to CZK 9,915 million. Mobile data, financial services, O2 TV and ICT were the key revenue growth drivers.
In Slovakia, total operating revenueimproved by 3.7% to EUR 146 million in the first half of 2019. In Czech koruna (CZK) the operating revenue reached CZK 3,756 million, up 4.4% year-on-year. Similarly to the Czech Republic, higher mobile data revenue was the key growth driver.
Consolidated earnings before depreciation and amortisation EBITDA improved by 12.6% year-on-year to CZK6,055 million in the first half of 2019, thanks to the higher revenue, savings in majority of costs and a positive impact of the new IFRS 16 accounting standard. In the Czech Republic, EBITDA grew by 11.5% to CZK 4,563 million, while Slovakia reported a 17.5% increase to CZK 1,510 million (+16.6% to EUR 59 million). Consolidated EBITDA margin improved by 3 percentage points to 31.9% in the first half of 2019.
Consolidated net profit declined by 6.2%year-on-year reaching CZK 2,604 million in the first half of 2019 as higher investments into growth areas in 2018 led to depreciation & amortisation growth.
KEY FINANCIAL INDICATORS OF THE GROUP
|Financial indicators||1H 2019||1H 2018||Year-on-year change|
- CZ mobile revenue
- CZ fixed revenue
- SK revenue
CZK 18,989 mil.
CZK 9,915 mil.
CZK 5,449 mil.
CZK 3,756 mil.
CZK 18,599 mil.
CZK 9,803 mil.
CZK 5,310 mil.
CZK 3,597 mil.
- of which operating costs
CZK 12,995 mil.
CZK 3,843 mil.
CZK 13,254 mil.
CZK 4,042 mil.
|EBITDA||CZK 6,055 mil.||CZK 5,378 mil.||+12.6 %|
|EBITDA margin||31.9 %||28.9 %||+3.0 p. p.|
|Net profit||CZK 2,604 mil.||CZK 2,776 mil.||-6.2 %|
 Since 1Q 2019, it comprises mobile customers who have generated revenue for the past 13 months and excludes Internet HD mobile customers using 4G LTE and WTTx wireless technologies; comparable data for the previous period have been adjusted.
 IPTV/ OTT including MULTI, web and mobile apps accesses.
 Fixed (xDSL, fiver), wireless (4G LTE, WTTx).