First year of Teo and Omnitel: completed integration and growth of profitability

Teo and Omnitel finished the first year of their joint operations with a profit - compared to 2015, annual consolidated revenue of Teo Group increased by 2.5 per cent to EUR 345.9 million last year. Annual EBITDA, excluding non-recurring items, amounted to EUR 117.1 million and was 5.9 per cent higher than in 2015.

In the fourth quarter of the year, Teo Group generated EUR 92.4 million in revenue (which was 0.8 per cent more than in the same period of 2015). EBITDA of the fourth quarter, excluding non-recurrent items, totalled EUR 28.5 million (and, compared to the respective period of 2015, it decreased by 2 per cent).

'2016 not only was the year of integration of Teo and Omnitel, but also the year of successful business growth. We managed to successfully overcome this complicated period without slowing down, and to focus on the key works of this year - services and technology integration' - said Kęstutis Šliužas, CEO of Teo and Omnitel.

He is convinced that the potential which Teo Group has accumulated by now is staggering. 'The evaluation of the Teo and Omnitel customer base revealed that more than half of Lithuania's population use Teo services. We are already able to offer them comprehensive solutions from a single source, which allow creating ecosystem of inter-related devices and technologies that make the life easier in every household', - said K. Šliužas.

Last year, Teo Group achieved a few very important milestones. On 4 January, it acquired 100 per cent of shares of Omnitel; unified corporate structures of the companies; started the reorganization of the companies having received the consent of the shareholders; offered services of installation of the Internet in one day for business; covered 99 per cent of the territory of Lithuania with 4G network; opened a TIER III certified datacentre; installed the latest 4.5G and VoLTE technologies; turned off the last analogue exchange; offered a single manager for business customers; ensured that mobile customers in the Scandinavian and Baltic countries browsed just like at home. The company invested EUR 26.6 million into the core and fiber-optic access network, and EUR 13.5 million - into mobile network. In addition, it finished the integration of Teo and Omnitel retail outlets and invested EUR 840 thousand into their upgrade. Business and residential customers are served by joint phone numbers for customer care.

Revenue from fixed communication services accounted for 52 per cent of the total revenue of both companies, from mobile communication - for 27 per cent, while sales of equipment accounted for 21 per cent.

Last year, we offered unlimited mobile Internet for a flat monthly fee to customers who are unable to connect to the fiber network, and business customers were able to use mobile Internet solution right away whilst broadband Internet was being installed for them.

In 2016, the number of Teo broadband Internet connections increased by 3.4 per cent and amounted to 404 thousand at the end of the year, of which the number of fiber-optic Internet accesses increased by 9.3 per cent and amounted to 246 thousand at the end of the year.

Year 2016 was another year of success of smart television (IPTV). The continuous growth of IPTV even accelerated and revenue increased by 28 per cent. It has been successfully replacing another not that modern TV service provided by Teo - digital terrestrial television. During the year the number of IPTV customers increased by 26 thousand and amounted to 191 thousand at the end of the year (an increase by 15.8 per cent). IPTV platform has been continuously improved during the year; a unique solution designated for the children 'Vaikų Kampelis' (Children's Corner) was offered in the fall.

In 2016, Omnitel built more than 600 new base 4G stations in the territory of Lithuania and now, according to the data of CRA, Omnitel's 4G network covers 99 per cent of the territory. Meanwhile, the number of post-paid service customers increased to 1 million. Last year they used the most 4G data in the history of the development of this technology in Lithuania. Over the year the number of active 4G customers increased by 42 per cent to 280 thousand, while the average amount of data used in 4G networks per month per one user increased by almost a fifth - to 6.06 gigabytes (GB). Having increased the amount of gigabytes in data packages in all payment plans, the average gigabyte data price was reduced by an average of 40 per cent.

For more information on the results of Teo Group in Q4 2016 and the entire year, please refer to the Company's website at www.teo.lt.