|Dec. 31, 2016||Dec. 31, 2015||Change||Change %||Dec. 31, 2014|
|Mobile customers||41,849||40,373||1,476||3.7 %||38,989|
|Contract customers||25,219||23,709||1,510||6.4 %||22,287|
|Prepay customers||16,630||16,665||(35)||(0.2) %||16,701|
|Fixed-network lines||19,786||20,227||(441)||(2.2) %||20,686|
|Of which: retail IP-based||9,042||6,887||2,155||31.3 %||4,383|
|Broadband lines||12,922||12,644||278||2.2 %||12,361|
|Of which: optical fiber||4,250||2,923||1,327||45.4 %||1,799|
|Television (IPTV, satellite)||2,879||2,683||196||7.3 %||2,442|
|Unbundled local loop lines (ULLs)||7,195||8,050||(855)||(10.6) %||8,801|
|Wholesale unbundled lines||4,212||3,015||1,197||39.7 %||2,153|
|Of which: optical fiber||2,555||1,444||1,111||76.9 %||718|
|Wholesale bundled lines||165||227||(62)||(27.3) %||305|
|Of which: consumers|
|Mobile customers||29,225||29,016||209||0.7 %||29,068|
|Contract customers||18,476||17,297||1,179||6.8 %||16,040|
|Prepay customers||10,749||11,719||(970)||(8.3) %||13,027|
|Fixed-network lines||15,550||15,900||(350)||(2.2) %||16,260|
|Of which: retail IP-based||7,722||6,076||1,646||27.1 %||3,974|
|Broadband lines||10,438||10,209||229||2.2 %||9,938|
|Of which: optical fiber||3,657||2,530||1,127||44.5 %||1,547|
|Television (IPTV, satellite)||2,686||2,492||194||7.8 %||2,254|
|Of which: business customers|
|Mobile customers||12,624||11,358||1,266||11.1 %||9,921|
|Contract customers||6,744||6,412||332||5.2 %||6,247|
|Prepay customers (M2M)||5,880||4,946||934||18.9 %||3,674|
|Fixed-network lines||3,255||3,339||(84)||(2.5) %||3,402|
|Of which: retail IP-based||1,234||773||461||59.6 %||387|
|Broadband lines||2,101||2,093||8||0.4 %||2,096|
|Of which: optical fiber||575||385||190||49.4 %||248|
|Television (IPTV, satellite)||192||190||2||1.1 %||186|
In Germany we continue to be market leader both in terms of fixed-network and mobile revenues. This success is attributable to our high-performance networks. We offer best customer experience with our broad product portfolio and our multi-award winning network quality: Awards were received for our fixed network in connect magazine’s network test, issue 8/2016, and our mobile network in the connect network test, issue 1/2017.
So far, we have won 3 million customers for our integrated product, MagentaEins, comprising fixed-network and mobile components.
In mobile communications, we won another 1.5 million customers in 2016. This growth was driven primarily by contract customers as a result of high demand for mobile rate plans with integrated data volumes.
Our “network of the future” offers state-of-the-art access technology. By the end of 2018, we want to have converted our entire network to IP technology. By the end of the reporting year, we had already migrated 12.9 million retail and wholesale lines to IP, which corresponds to a migration rate of 53 percent. 9
We continue to see strong demand for our fiber-optic products. As of the end of 2016, the number of lines had increased to 6.8 million overall, which means we connected 2.4 million households to our fiber-optic network in Germany over the last 12 months. With the progress in fiber-optic roll-out and innovative vectoring technology, we successfully drove forward the marketing of substantially higher bandwidths – and will continue to do so more and more in the future. With our contingent model, we create incentives for the migration from traditional wholesale products – such as bundled wholesale lines or unbundled local loop lines (ULLs) – to higher-quality fiber-optic wholesale lines.
We are generating momentum with our excellent network quality and our broad product portfolio for high-value contract customers. We offer our customers the best possible mobility, with an improved service package and transparent, fair offers. Our new MagentaMobil portfolio offers our customers wide-ranging benefits: more high-speed data volumes, a HotSpot flat rate, and free roaming in other EU countries.
In the reporting year, we won another 1.5 million contract customers. Of these, 563 thousand were branded contract customers under the Telekom and congstar brands, while the customer base at Telekom Deutschland Multibrand GmbH grew by 52 thousand. The contract customer business of resellers (service providers) recorded 896 thousand net contract customer additions. The number of prepay customers decreased slightly by 35 thousand.
Due to the persistently challenging development in the fixed-network market, primarily owing to aggressive pricing offers of competitors, we are pursuing new paths in marketing focusing on integrated offers and on TV and fiber-optic lines. As a result, the number of our broadband lines increased by 278 thousand year-on-year. 22.3 percent of our broadband customers are TV customers, with 196 thousand TV customer additions recorded in the reporting year alone. In the traditional fixed network, the number of lines decreased by 441 thousand.
Our MagentaZuhause rate plans offer a comprehensive product portfolio for the fixed network based on IP technology and rate plan-specific bandwidths. MagentaZuhause Hybrid bundles fixed-network and mobile technology in a single router. To date, 294 thousand customers have selected this rate plan, primarily those based in rural areas.
We have also connected a total of around 164 thousand apartments to our network through our partnerships in the housing sector.
With 29.2 million customers at the end of 2016, our mobile customer base remained at the prior-year level overall. The number of prepay customers decreased by 970 thousand, primarily as a result of some customers switching to our mobile contracts, for example to our cost-effective congstar rate plans. By contrast, we added 1.2 million mobile contract customers over the course of the year, thanks mainly to our More For More initiative and the Allnet Flat rate plans at congstar. Contract customer business with resellers (service providers) also developed positively.
In the fixed-network market, competition remains intense. In 2016, we migrated 1.6 million customers to IP-based lines in the fixed network. We won 194 thousand new TV customers compared with the end of 2015. In the reporting year, of the 10.4 million broadband lines in total, 3.7 million were fiber-optic lines, representing a year-on-year increase of 1.1 million.
The positive trend in the Business Customers segment from the prior year continued: Since the beginning of 2016, we have recorded 1.3 million mobile customer additions, 332 thousand of whom were high-value contract customers. In mobile Internet, customers are increasingly opting for plans with more bandwidth, in conjunction with higher-quality terminal equipment. We added 934 thousand new M2M SIM cards in a very aggressively priced market. This growth was due to the increased use of SIM cards, especially in the automotive and logistics industries. The number of customers with fixed-network lines declined by 2.5 percent compared with the end of 2015. The number of broadband lines remained at the prior-year level at 2.1 million, with the number of fiber-optic lines increasing substantially by 49.4 percent.
There was also a positive trend in demand for cloud products, where we recorded revenue growth of 9.3 percent. We also recorded growth in new IP-based products from our DeutschlandLAN product range, such as IP Start and IP Voice/Data.
At the end of 2016, fiber-optic lines accounted for 22.1 percent of all lines – 9.3 percentage points higher than the prior-year figure. The strong growth in our wholesale unbundled lines by 1.2 million or 39.7 percent compared with 2015 was primarily attributable to the strong demand for our contingent model. By contrast, the number of bundled wholesale lines decreased by 62 thousand. This trend is likely to continue for the next few years due to the fact that our competitors are switching from bundled to unbundled wholesale products with more bandwidth, or to their own infrastructure. The number of unbundled local loop lines decreased by 855 thousand or 10.6 percent compared with the end of the prior year. This is due first to the move to higher-quality fiber-optic wholesale lines, and second to retail customers switching to cable operators. In addition, wholesale customers have been migrating their retail customers to fiber-optic lines. The total number of lines in the wholesale sector increased slightly compared with 2015 to 11.6 million.
DEVELOPMENT OF OPERATIONS
|millions of €|
|Total revenue||22,041||22,421||(380)||(1.7) %||22,257|
|Business Customers||5,923||5,942||(19)||(0.3) %||5,898|
|Profit from operations (EBIT)||4,081||4,490||(409)||(9.1) %||4,663|
|Depreciation, amortization and impairment losses||(3,809)||(3,755)||(54)||(1.4) %||(3,893)|
|Special factors affecting EBITDA||(910)||(545)||(365)||(67.0) %||(254)|
|EBITDA (adjusted for special factors)||8,800||8,790||10||0.1 %||8,810|
|EBITDA margin (adjusted for special factors)||%||39.9||39.2||39.6|
|Cash capex||(4,161)||(5,609)||1,448||25.8 %||(3,807)|
|The Value-Added Services segment was dissolved as of January 1, 2016, and the revenue allocated to Consumers, Business Customers, and Other. Prior-year figures have been adjusted accordingly.|
Total revenue decreased by 1.7 percent compared with 2015. This development was driven mainly by non-contract terminal equipment revenue in mobile business, which decreased by 3.4 percent. Increased IT and broadband revenues had a positive impact on fixed-network revenue. However, this was not sufficient to completely offset declines in other areas, such that revenue in the fixed-network business decreased by 1.5 percent overall. Wholesale products developed positively, increasing by 2.3 percent year-on-year.
Revenue from Consumers declined by 3.4 percent compared with the prior year. Volume-related revenue decreases continued to dominate traditional fixed-network business, which declined by 2.0 percent, mainly due to lower variable charges and voice revenue. By contrast, revenue from broadband business increased by 1.7 percent. Mobile revenues declined by 5.1 percent, driven largely by terminal equipment business. Our mobile service revenues decreased by 0.7 percent compared with the prior-year level; however, the increase in service revenues under the congstar brand almost completely offset the decline in revenues from prepay business and from branded contract customers.
Revenue from Business Customers declined slightly by 0.3 percent. Mobile revenues grew slightly. Service revenues were at around the same level as in the prior year. In the fixed network, a decline was recorded in traditional voice telephony, due largely to the increasing number of customers moving to flat rate plans. By contrast, IT revenues developed particularly positively, though this was not enough to fully compensate for the loss of revenues from traditional telephony business.
EBITDA, adjusted EBITDA
EBITDA adjusted for special factors remained stable compared with the prior-year level at EUR 8.8 billion. We were able to compensate for the loss of revenue with efficiency enhancement measures across all functions. Our adjusted EBITDA margin increased significantly to 39.9 percent (prior year: 39.2 percent).
EBITDA amounted to EUR 7.9 billion in the reporting year, a decline of 4.3 percent against the prior year, due mainly to higher special factors for expenses in connection with our staff restructuring. The take-up of the instrument of early retirement for civil servants in particular was substantially higher in the reporting year.
Profit from operations decreased by 9.1 percent to EUR 4.1 billion year-on-year. This was primarily attributable to higher expenses incurred in connection with staff-related measures and slightly higher depreciation and amortization.
We again made significant investments in the broadband and fiber-optic roll-out, our IP transformation, and our mobile infrastructure as part of our integrated network strategy.