Republic of Serbia

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Key financials (in EUR million)

2014

2013

Change
in %

*

Changes are mostly due to an adjustment in the method for the calculation of the competitors’ mobile customer base.

Revenues

213.2

182.6

16.8

EBITDA comparable

64.0

64.0

−0.1

EBITDA comparable margin

30.0%

35.0%

EBITDA incl. effects from restructuring and impairment tests

64.0

64.0

−0.1

Operating income

−2.9

−8.6

n.m.

Capital expenditure

37.8

52.7

−28.2

 

 

 

 

Mobile communication

 

 

 

ARPU (in EUR)

6.9

7.4

−5.7

Mobile communication subscribers (in ̒000)

2,159.5

2,017.7

7.0

Share of contract customers

50.4%

50.8%

Market share*

22.5%

21.1%

Penetration

133.6%

133.1%

 

 

 

 

Employees (full-time equivalents as of 31 Dec)

933

918

1.6

In the Republic of Serbia, Vip mobile continued on its growth path in 2014 and increased the number of its mobile customers by 7.0% to just under 2.2 million. The successful focus on high-value customer segments was reflected in contract customer growth; at the same time the positive reaction to a no-frills product helped to increase the prepaid customer basis. The company’s market share climbed by 1.4 percentage points to 22.5%, although this was due in part to the cleaning of a competitor’s customer base, resulting in a reduction in the total number of mobile customers in the market.

Despite negative FX effects of EUR 7.9 mn (2013: EUR 0.1 mn), resulting from the 3.6% decline of the Serbian Dinar versus the Euro, Vip mobile increased revenues by 16.8% to EUR 213.2 mn in the year under review. This was primarily driven by higher equipment revenues attributable to a change in the revenue recognition for handsets. Monthly fee and traffic revenues were slightly reduced due to FX effects. Operationally an increase in monthly fixed fees due to the higher proportion of contract customers was mostly offset by a decline in traffic and roaming revenues as well as the reversal of a deferral effect for equipment revenues. Lower termination rates also served to reduce interconnection revenues. Other revenues fell as a result of the change in handset revenue recognition. Average monthly revenue per mobile user (ARPU) declined to EUR 6.9 (2013: EUR 7.4) as a result of the lower level of variable mobile revenues as well as regulatory effects.

Higher material expenses resulting from the change in the revenue recognition for handsets were the main reason for the 23.9% increase in operating expenses to EUR 158.0 mn. This was only partially mitigated by reduced interconnection costs due to the adjustment of termination rates in accordance with the glidepath.

All in all, the rise in revenues outweighed the increased operating expenses in the 2014 reporting year, leading to a stable EBITDA comparable of EUR 64.0 mn. The EBITDA comparable margin, however, fell as a result of higher operating expenses from 35.0% in the previous year to 30.0% in 2014. Earnings included negative foreign exchange effects in the amount of EUR 2.4 mn. Operating income improved from a negative EUR 8.6 mn in the previous year to a negative EUR 2.9 mn due to the lower level of depreciation for equipment.

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