Excellence in operations is the founding principle of all strategic elements, in the sense that improvements in efficiency and the optimisation of workflows provide the foundations for future business success. In 2014 the Group achieved its target of gross cost reductions (CAPEX and OPEX) of approximately EUR 100 mn. For 2015 management has set a new target of EUR 90 mn.
The company has also initiated a comprehensive transformation programme for cash flow growth, targeting market, procurement and technology transformation. With regard to market transformation and value-based management, Telekom Austria Group aims to maximise customer value throughout the customer lifecycle via tariff and subsidy initiatives. In the area of procurement, supply chain centralisation and vendor consolidation are expected to help streamline the business. As regards technology, a variety of initiatives to enhance the Group’s IT network are also in process, including network function virtualisation, billing and backbone transformations, as well as service centre centralisation.
In summary, in the medium term Telekom Austria Group endeavours to pull multiple levers to achieve an increase in operating revenues, cost savings and greater capex efficiency. This will ultimately be reflected in a substantial free cash flow increase.