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Belgacom - Regulatory Intervention Takes the Shine off a Good Operational Performance
BelgacomÃ's Q3 financial report shows reduced revenues, reduced EBITDA and reduced profit, whether at the operating, pre-tax or after tax level. The 2.6% drop in revenue (to €1,473m) became -4.7% at the EBITDA line (€503m) and this continued on down the P&L, with operating profit 6.0% lower and pre-tax off 8.1% at €285m and €215m respectively.
BelgacomÃ's mobile base continued to grow throughout the period, increasing from 4.494m in Q3 07 to 4.821m one year on, by way of 4.765m in Q2 08. The quality of the base has improved considerably: of the 327k new connections, 261k were new contract customers. The pre-paid base dropped by five thousand with the balance of 71k coming from MVNOs.
Despite this increase, overall mobile revenues were down in the quarter, from €519m to €504m, while EBITDA was off €11m at €225m. This compares with €869m to €838m (revenue) and €278m to €260m (EBITDA) at the fixed side. The decline in mobile revenue can be attributed to lower voice revenues (down from €405m to €393m) and higher discounts (up from €63m to €82m).
The main reason the voice traffic number is down is regulatory interference. Belgacom, like all other European operators, has had to cut termination rates and roaming rates and thus, while the overall number of minutes and messages are up (from 163.5 to 174.9 and 78.6 to 93.2, respectively) the ARPU they generate is down.
Blended ARPU dropped from €40 to €36.7, with the voice element within this dropping from €30 to €26.5. Messaging and Data were, by contrast, up from €9.9 to €10.3. Business customers would appear to be the main beneficiary of the EUÃ's intervention, as contract spend fell from €59.6 to €51.2, while prepaid customers actually spent more, their ARPU increasing from €20.9 to €21.4. This may not have been what the "pro-consumer" Viviane Reding wanted to achieve, but it is what most commentators (including TMW) told her would happen.
Posted to the site on 13th November 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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