Key facts:
The Mobistar group's customer base, including MVNO's, grew by 14.8 % compared to June 2007. At the end of the first semester of 2008, the group Mobistar had 3,720,018 active customers, an increase of 479,502 customers compared to June 2007. A total of 230,159 customers were acquired in the first six months of 2008.
The increase in the number of active customers has a positive effect on revenues, but cannot prevent that the decrease of the roaming and mobile termination rates (MTR) had a negative influence on the ARPU (Average Revenue per User). The ARPU evolved from 36.90 euro at the end of June 2007 to 33.13 euro per month per active customer one year later.
Regulations had a 55.9 million euro impact in the first semester of this year, taking the BIPT's new decision regarding the MTR partially into account. Despite the decrease in the roaming and mobile termination rates, Mobistar group's consolidated revenue remains approximately stable thanks to a positive contribution from Luxemburg operator VOXmobile. Consolidated revenue amounted 745.5 million euro at the end of June 2008, compared to 747.2 million euro a year earlier or a decrease of 0.2 %.
In line with expectations, Mobistar manages to keep its EBITDA margin stable at 41.9 % of service revenues, thanks to continued cost controlling and the favourable evolution of its commercial activities.
The evolution of revenues and net profit exceeds initial guidance. Therefore, Mobistar is adjusting its guidance upward and anticipates a slight decrease in revenues of 0 to
2 % for the financial year 2008 compared to the initially expected decrease of 1 to 3 %. Mobistar anticipates a decline of 2 to 4 % in the net result per share at the end of this year, in accordance with the expected number of shares on the market at the end of December 2008.
Mobistar concluded the first phase of its share buyback programme. During the Shareholders Meeting, there has been decided to annul 1.3 million of the company's own shares, for an amount of 73.7 million euro.
Mobistar's Board of Directors decided to proceed to the second phase of its share buyback programme, as announced in early February 2008.
I Mobistar S.A.
Continued commercial success thanks to the mobility strategy
Mobistar reconfirms the success of its 'mobility centric approach' with growth of its customer base. Last year it was confirmed that this business strategy would be applied. The 'mobility centric approach' implies for the residential market a 'fixed-to-mobile substitution' strategy and a convergence strategy in the professional market.
Replacing fixed telephony with mobile telephony in residential customers' homes continues. In February 2008, three new versions of AtHome were launched: AtHome Evening & Weekend for 4 euro, AtHome Always for 7 euro and AtHome Always & Everywhere for 10 euro. At the end of June 2008, Mobistar registered almost 100,000 Mobistar AtHome customers. Thanks to this option, they can call from home with their mobiles to fixed lines in their own country and abroad at low rates. For the internet too, the customer can now replace his fixed line with a Mobistar mobile version. Internet Everywhere, allowing surfing the web for 1 euro per day on the EDGE/HSDPA network, is also a great success. At the end of June, Mobistar s.a. counted 26,000 mobile internet customers (Internet Everywhere and Business Everywhere).
The convergent approach is proven to be the right strategy for the professional market and was confirmed by the success of products like One Office Voice Pack. 16,138 companies already chose this flexible pricing formula, which bundles fixed and mobile telephony. The number of mobile telephony cards is at 106,326 and the number for fixed lines stands at 93,146. In addition, Mobistar launched One Office Full Pack at the end of May, which bundles fixed data in addition to fixed and mobile telephony. Using this formula, companies save up to 30 % of their telecom expenses.
Mobistar announced that mobile data was going to be one of its growth axes for the future, thanks to a performing mobile broadband network. Today, Mobistar has the most complementary mobile broadband network in Belgium, covering 99 % of the population with its EDGE network and almost 75 % with the 3G/HSDPA network. This resulted in an increase in the use of services like Internet Everywhere, Business Everywhere and WAP. In addition, more machine-to-machine applications are being developed with Mobistar. At the end of June 2008, mobile data represented 20 % of service revenues, compared to 17 % a year earlier.
The segmented approach continues to play an important role in the further expansion of the customer base. Through MVNO agreements, Mobistar can respond even better to customers' needs in well-defined segments. Lycamobile and Telenet together counted 297,073 active customers at the end of June 2008. Mobistar announced that during 2008 new MVNO partners would join. On 1 July 2008, Mobistar signed an agreement with Blyk, the mobile network for youth, which is funded by advertising.
Evolution of the customer base
On 30 June 2008, Mobistar S.A. had a total of 3,645,184 active customers, including the number of MVNO customers, 404,668 more than the 3,240,516 customers a year earlier, or an increase of 12.5 % in a year. The increase by 404,668 consists of 148,376 new Mobistar customers and 256,292 new MVNO customers.
The customer base, including MVNO customers, increased by 4.5 % during the first six months of 2008, from 3,489,859 customers at the end of 2007, to 3,645,184 customers at the end of June 2008.
The new Mobistar customers are mainly postpaid customers, which further improved the number of subscribers in the customer base. The share of the postpaid customers in the customer base reached 55.4 % at the end of June 2008, compared to 54 % at the end of 2007 and 53.4 % at the end of June 2007.
The business segment represents 19.7 % of the postpaid customers, an increase of 1.47 % compared to last year, thanks to the success of One Office Voice pack in the small and medium company segment and a few large contracts in the corporate segment.
At the end of June 2008, Mobistar S.A. had 76,186 ADSL customers, 22,271 our own ADSL customers and 53,915 ADSL customers from wholesale partners.
Evolution of the average monthly revenue per user (ARPU)
The average monthly revenue per user (ARPU) decreased during one year from 36.9 euro to 33.13 euro per month per active customer. The drop of the ARPU was caused by the lowering of the mobile termination rates (MTR) in 2007 and 2008, the decrease of the roaming rates and increased pressure on prices.
Thanks to continued growth in usage by Mobistar's customers, the ARPU fall was partially compensated. During the first semester of 2008, Mobistar customers made on average 9.5 % more calls than in the same period the year before and they sent 31 % more text messages than in the first semester of 2007. Usage of other mobile data activities is also increasing.
The use of mobile data also saw a major increase, generating a share of mobile data in service revenues up to 20 % at the end of the first semester of 2008, compared to
17 % at the end of June 2007. The increase results from a grow in the use of SMS, Internet Everywhere, Mail & Surf and the updated Orange World services in the residential market and of Blackberry®, Business Everywhere and various machine-to-machine applications in the professional market.
Revenues
On 30 June 2008, Mobistar's service revenues amounted 700.4 million euro, compared to 720.9 million euro at the end of June 2007, or a 2.8 % decrease. Regulations had a 55.9 million euro impact in the first six months of 2008, taking the BIPT's new decision regarding the MTR partially into account. This decision includes a decrease of the mobile termination rates in May 2008 and the cancellation of BIPT's initial decision, which envisioned a decrease in February 2008. The impact of this cancellation, 5.7 million euro, has not been included in the results because of the legal uncertainty regarding this discussion. Mobistar generated more income from an increase in handset sales and a grow in online sales activities and in its own distribution channels.
Total turnover amounted 727.7 million euro for the first half of 2008, or a decrease of 2.6 % compared to the 747.2 million euro achieved at the end of June 2007.
II VOXmobile
| Key Figures VOXmobile
| H1 2008 | H1 2007 pro forma | Variation
|
| Total active customers(1) (mobile telephony) | 74,834 | 70,569 | +6.0 % |
| ARPU(²) (€ /month) | 32.18 | 33.30 | -3.4 % |
| Total turnover (Mio € ) | 18.3 | 17.0 | +7.6 % |
| Total service revenues (Mio € ) | 16.5 | 15.1 | +9.3 % |
At the end of June 2008, VOXmobile had 74,834 active customers, a 6 % increase compared to the 70,569 active customers at the end of the first semester of 2007.
VOXmobile's results are being consolidated as of 2 July 2007. Service revenues of the Luxemburg operator for the first six months of 2008 amounted 16.5 million euro, compared to 15.1 million euro for the same period a year earlier, or a year-on-year increase of 9.3 %. In the first semester of 2008, total turnover rose to 18.3 million euro, an increase of 7.6 % compared to the 17 million euro in June 2007.
VOXmobile customers' ARPU decreases slightly, from 33.30 euro per active customer per month at the end of June 2007, to 32.18 euro at the end of June 2008. This is a result of the decrease of the mobile termination and roaming rates in Luxemburg and the high pressure on prices resulting from an aggressive pricing policy by the historical operator.
During the first semester of 2008, VOXmobile expanded its distribution network by collaborating with more partners, both for the residential and the small and medium-sized business segment.
III Consolidated numbers for the group Mobistar
Results
The consolidated turnover for the first half of 2008 amounted 745.5 million euro, compared to 747.2 million euro at the end of June 2007 and remained stable. On 30 June 2008 consolidated EBITDA amounted 300.0 million euro, compared to 302.0 million euro at the end of the first semester of 2007. Mobistar also invested in its fix network activities in order to be able to better promote the bundled offer of fixed and mobile telephony on the business market.
Continuous cost controlling and efficient operations management allow Mobistar to maintain its profitability, with an EBITDA margin of 41.9 % of the service revenues on 30 June 2008.
The consolidated net profit decreases slightly compared to last year, from 150.7 million euro at the end of June 2007 to 145.1 million euro on 30 June 2008, a decrease of
3.7 %. This results in a net profit of 2.30 euro per share on 30 June 2008, compared to 2.38 euro per share at the end of June 2007.
Investments
Mobistar continues to invest in a performance network and national and controlled distribution. The investments during the first semester of 2008 amounted 69.6 million euro, or 9.7 % of service revenues. During the same period last year, investments were 58.3 million euro. During the first half of 2008 the expansion of the broadband network was accelerated, thanks to the new operational model. Today, Mobistar has the most complementary mobile broadband network in Belgium, covering 99 % of the population with its EDGE network and almost 75 % with the 3G/HSDPA network.
IV Trends
Mobistar will continue with its current strategy in 2008. The operator remains convinced that the 'mobility centric approach' is the best way to create value for its shareholders and offer optimum service to its customers. In addition to the growth of voice traffic, the use of mobile data services offers a major potential for growth.
In the residential market, Mobistar will continue to replace fixed with mobile telephony. In the professional market, Mobistar will continue to offer convergent solutions and continue to invest in expanding its fixed-line products.
Mobistar doesn't expect additional decreases in addition to the MTR decrease in May and June 2008. The first drop for 2008, from 10.63 to 9.94 eurocent per minute was effected 1 May 2008. On 1 July, a second decline of mobile termination rates was introduced, from 9.94 to 9.02 eurocent per minute.
In this context, Mobistar is adjusting its guidance upward and anticipates a slight decrease in revenue of 0 to 2 % for the financial year 2008, compared to the initially expected decrease of 1 to 3 %. Mobistar expects that, because of efficient cost management, the EBITDA margin for 2008 will be at least 40 % and that the investment level of approximately 10 % of service revenues will be maintained. Mobistar anticipates a decrease of 2 to 4 % of the net profit per share at the end of this year, in accordance with the expected number of shares on the market at the end of December 2008.
V Remuneration of shareholders
Mobistar's Board of Directors decided to proceed to the second phase of its share buyback programme, as announced in February of this year. During this second phase, Mobistar will spend a total amount of 101.3 million euro to buy back its own shares, as soon as the capital decrease of 4 euro per share is implemented on 6 August 2008. The shares that will be bought during the second semester will also be annulled at the end of the year 2008.
The majority shareholder confirms that he will not participate in the share buyback programme. The progress of the share buyback programme will be available on the website.
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Mobistar (EURONEXT BRUSSELS: MOBB) is one of the main actors in the world of telecommunications in Belgium and Luxembourg, active in mobile telephony, fixed telephony, ADSL and on other markets with a strong growth potential. The company develops innovative products and services for the residential and the business market. Mobistar is listed on the Brussels Stock Exchange and is part of the France Télécom group.