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Wind Group - ARPU Holds Up in Italy As Greek Business Improves Profitability
Both European subsidiaries of Naguib SawirisÃ' Weather Investments have recently reported first quarter results, both showing net subscriber growth of less than 2% in the traditionally slow first quarter. In Greece, the combined total of WIND Hellas and prepaid-only unit Q-Telecom recorded an increase of just 1.3% in Q1. Meanwhile in Italy, WIND managed 1.9% growth, although there is an error margin here of more than 0.3pp due to the fact that customers tnumbers are only released to the nearest 0.1m.
For the 12 months to 31 March 2008 the results were the other way round, as the Greek company managed a 10.0% rise in connection numbers, whilst the Italian unit was struglling with 4.7%. Nevertheless, WIND Italy remains much the larger business, just under three and a half times the size by customer numbers at the end of Q1 08, versus 3.65 times the size a year earlier.
Much to the operatorÃ's credit, WIND Italy has almost managed to maintain last yearÃ's ARPU figure, as the monthly average dropped from €18.50 to €18.30 between Q1 07 and Q1 08. The 1.1% annual decline pales into insignificance compared with the 17% atrophy at Telecom Italia. A 6% increase in minute usage per customer at WIND helped revenues, but was dwarfed in significance by a 153% increase in SMS usage from 27 to 68 per customer per month.
Whilst WINDÃ's ARPU remains lower than its larger rivalÃ's, despite the decline over the last year, the strength of its ARPU in the face of significant pricing pressure due to termination and roaming rate cuts is impressive. Unfortunately, in Greece there was no such stability as ARPU fell more than 10% year on year from €18.90 to €21.10 per month, largely as a result of the same EU-mandated decline in interconnect rates afflicting its sister companyÃ's larger competitor in Italy.
Thanks to the customer growth, mobile service revenues in Greece increased 2.3% to €258m, or by 1.5% overall, including equipment sales. On this it recorded a 15.5% uplift in EBITDA to €98m, as operating efficiencies were made, boosting the margin from 31.3% to 35.6%. The small Greek fixed business recorded a margin of 36.4% in Q1 08 which for the first time made Greece the more profitable market, as Italy posted a 6.6% increase in EBITDA to €456m on revenues of €1.3bn - equivalent to a margin of 35.1%.
Posted to the site on 28th May 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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