Teo adds 6,733 TV subscribers in 3Q 2015

TEO LT sales are boosted by IT and smart services

The revenue of IT and telecommunications company Teo during the third quarter of this year increased by 3.3 per cent over the year and amounted to EUR 51.1 million, EBITDA (excluding non-recurring expenses) during the three months until October rose by 5.3 per cent. The revenue growth was mainly due to the growing share of IT services and the number of broadband Internet and smart TV customers that grew at the fastest rate (up 6 and 8.4 thousand in the quarter, respectively) in the past three years.

Teo revenue for the first nine months of this year amounted to EUR 150.4 million and, compared to the same period last year, increased by 1.1 per cent or EUR 1.6 million. A 37.6 per cent per year increase in revenue from IT services and a 3.7 per cent increase in service sales to residents had the greatest impact on the Company’s revenue growth.

“The strategy chosen by Teo to develop next-generation IT and telecommunications business is working – we continue to change our service portfolio and revenue structure. As revenue from traditional voice telephony continues to decline, we keep consistently increasing the sales of IT services and equipment. We have noticed that customers more and more frequently purchase higher definition and quality TV sets from Teo in order to take full advantage of the benefits of Teo smart TV service”, Kęstutis Šliužas, CEO of Teo, says.

Over the past 12 months, the number of Teo smart television (IPTV) users increased by 23.1 per cent (up 29,000 to over 152,000), while the number of FTTH Internet users – by 12.3 per cent. This is the largest growth in the number of IPTV and high-speed Internet users during the last three years. In September, the total number of Teo TV service users already exceeded 200 thousand.

During the year, revenue from IT equipment sales grew by 2.2 times. At “Smart Home of Teo” showrooms and in the online shop of Teo, customers purchased mostly TV sets; their sales grew by 4.5 times during the year.

Although revenues from retail voice telephony services to residential and business customers declined by 12.5 per cent, the number of disconnections was also the lowest since 2012. Revenue from voice transit increased by 8.6 per cent during the year.

EBITDA (excluding non-recurring expenses) for the third quarter rose by 5.3 per cent during the three months until October and amounted to EUR 20.1 million. Compared with the same quarter a year ago, Teo EBITDA (excluding non-recurring expenses) for the third quarter decreased by EUR 0.8 million. The change in the service portfolio resulted in a 12.8 per cent increase in the cost of goods and services over the year.

During January-September 2015, Teo investments in the next-generation fiber-optic access network, IT and IPTV services increased by 14.5 per cent and amounted to EUR 20.5 million. During the period from July to October, Teo opened another three new “Smart Home of Teo” customer care showrooms of a new concept in Telšiai, Vilnius and Šiauliai.

Number of TV services customers

                                       Y-o-Y                   Q-o-Q    Q-o-Q
          30-09-2015  30-09-2014  Change (%)  30-06-2015  Change (%)   Change
          ----------  ----------  ----------  ----------  ----------  -------
Total        201,719     181,283        11.3     194,986         3.5    6,733
 IPTV        152,479     123,885        23.1     144,091        10.5    8,388
 DVB-T        49,240      57,398      (14.2)      50,895       (3.3)  (1,655)