-100k active ULL customers at the beginning of March '08
-Leading Unbundler in Greece with 30% market share
-35% market share in new adds for the first two months of 2008
-34k new ULL net adds in Q4 07
-Revenue Growth accelerates for Q4 to YoY 32%
-Emphasis is shifting to Unbundling at the expense of wholesale
-As a result the company expects that during H2 2008 will be EBITDA positive
Local Loop Unbundling
Forthnet continued its progress in unbundling with record levels of ULL net adds during Q4 '07.
Forthnet ULL Customer Base 4Q '07 3Q '07 2Q '07 1Q '07
New ULL net activations 33,820 27,300 14,130 1,150
Market Share in New Adds 30% 42% 25% 6%
Total ULL 76,400 42,580 15,280 1,150
Overall Market Share 28% 26% 16% 3%
During the first week of March, Forthnet reached 100,000 active ULL customers and became the leading unbundler in Greece with a c30%overall market share(1) and c35% market share in new additions for the first two months of 2008. Forthnet 2Play continuous its strong uptake, constituting 72% of Forthnet's active ULL subscriber base with monthly ARPU at euro 45.5 (excl. VAT).
As unbundling accelerates the company is moving the emphasis away from wholesale broadband and CPS telephony.
Forthnet Broadband Customer Base 31/12/07 30/09/07 31/12/06
Forthnet Broadband subscribers(2) 200,346 189,267 101,063
Quarterly net additions 11,089 26,427 26,391
Forthnet active ULL subs 76,400 42,580 0
Unbundled Customers as a % of total 38.0% 22.5% n/a
The number of broadband customers at the end of the year stood at more that 200k customers while at the end of February it was more than 210k customers. Demand for Broadband, 2play and other ULL services, is expected to remain strong. The ULL focus as oppose to wholesale broadband or CPS services is expected to lead, faster than expected, to the improvement in the financial performance of the company. As a result the company expects that it will be EBITDA positive during the second half of 2008.
In an effort to increase further its appeal to the consumer market, Forthnet is increasing the retail network of Forthnet branded shops. In February 08, the number of Forthnet Broadband shops, through a mix of mainly franchised, shop-in-a-shop and owned stores was 60. This number is expected to grow to 100 by year end.
Consolidated 4Q '07 Revenues
Revenue Breakdown (in '000 euro) 4Q 07 4Q 06 % change
Voice 14,923 13,883 7.5%
Internet Access 11,244 4,617 143.5%
Business Services & Applications 7,228 6,797 6.3%
Total Revenues 33,395 25,297 32.0%
During the 4rd quarter of '07, Forthnet reported total revenues of euro 33.3m recording a 32.0%% growth for the quarter, driven by ULL Broadband customers and services.
4th Quarter 07, key results (in '000 euro) 4Q 07 3Q 07 Q4 06
Turnover 33,395 29,300 25,297
Quarterly Revenue Growth 32.0% 21.8% 2.0%
Pre-tax Profit/Losses -8,864 -9,982 -8,059
Losses after tax and minority rights -7,563 -7,966 -7,271
Capital Expenditures 30,422 14,205 19,644
2007, key results (in '000 euro) 12M 07 12M 06
Turnover 119,416 98,487
Earnings before Interest Tax and Depreciation (EBITDA) -20,085 -4,976
Pre-tax Profit/Losses -40,442 -19,379
Losses after tax and minority rights -32,530 -16,699
Capital Expenditures 64,324 36,026
Revenues for '07 amounted to euro 119.4m representing a 21.3% growth for the year. Reported EBITDA for the period was loss-making at euro 20.1m, against a loss of euro 4.9m in '06. The operating performance is recording a gradual improvement leading to a 4th quarter EBITDA loss of euro 1.9m (3Q '07: -?4.8m) in spite of higher Q4 advertising expenses (+euro1.9m) partly due to a change in the accounting policy of certain ULL related subscriber acquisition costs. Net result after tax and minority interest stood at a loss of euro 32.5m compared to losses of euro 16.7m in '06.
Capital Expenditure for the year reached euro 64.3m against euro 36.0m in '06 with capex spending accelerating during the 4rh quarter (euro 30.4m). The company has already executed a big part of its announced investments plan, earlier than expected. Forthnet's Balance Sheet is posting strong liquidity with a year end net cash position and cash & cash equivalent standing at euro 56.1m as of December 30th '07. Over and above, the Company has undrawn tranches from its Credit Facility to further finance its investment plan.
Collocation sites and Forthnet backbone network
To date, OTE has delivered(3) 151 Exchanges corresponding to a footprint of c65% local loop coverage whilst the Company is already offering its ULL services through 113 Exchanges. OTE to date has delayed the backhaul capacity to 38 exchanges. Over the next two months as backhauling is delivered, the remaining local exchanges will become operational.
Finally, the Company is progressing well with its backbone network with Athens, Thessaloniki, Larissa, Volos, Tripoli & Heraklio fibre optic network (MANs) for the interconnection of the collocated exchanges having extended to 320km. Finally, Forthnet has activated its Athens-Thessaloniki-Sofia link as planned, interconnecting also cities along the national motorway.
(1)In accordance with NRA reports on overall ULL market.
(2)Active & pending activation wholesale ADSL and 2Play customers, plus active & pending activation Unbundled customers.
(3)Site preparation, power provision, A/C and local loop deployment.