Mobile communications operator life:) announces its financial and operational results for the third quarter of 2010. life:) delivered successful results, focusing on profitability in the light of macroeconomic improvement in the Ukrainian market in 2010 compared to last year.
In the third quarter, in a challenging competitive environment, the operator focused on its turnaround strategy for higher profitability, closing down its non-profitable carrier business line and focusing on higher ARPU generating subscribers, rather than growing subscriber share in the market. During the quarter, life:)’s revenue was realized at $84.9 million, decreasing by 8.9% compared to 3Q 2009 mainly due to the close down of the carrier business line and declining interconnect rates. In local currency terms, revenue in Q3 2010 decreased by 8.2% year-on-year.
In the third quarter, life:)’s EBITDA tripled compared to a year ago thanks to its commitment to a turnaround strategy and efficient cost control initiatives. The operator’s EBITDA margin increased to 25.3% from 7.9% in the same period of last year. The main drivers of this increase were the tariff redesigns to decrease interconnection costs and cost cutting measures.
As for the operational performance indicators, life:)’s registered and three-month active subscribers have been negatively impacted due to a change in definition of active subscribers. The numbers of registered and three-month active subscribers were 9.8 million and 6.3 million respectively.
The 3-month active ARPU increased by 13.2% year-on-year mainly due to a decline in the number of active subscribers along with the change in the active subscriber definition. MoU increased by 8.8% to 167.0 minutes year-on-year.
The CEO of life:) Erdal Yayla commented: “We are pleased with the positive returns achieved due to our turnaround strategy. We are now focusing on higher ARPU generating subscribers, rather than growing our subscriber share in the market. In this respect we modified the definition of active subscribers. We are particularly encouraged with the significant growth of EBITDA, which almost tripled compared to last year. We believe this proves that we are moving in the right direction and we expect life:) to achieve a double digit EBITDA margin in 2010”.
| Summary data for Astelit |
Q309 |
Q210 |
Q310 |
y/y % chg |
q/q % chg |
|
| Number of subscribers (million) | ||||||
| Total |
11.8 |
11.7 |
9.8 |
(16.9%) |
(16.2%) |
|
| Active (3 months)[1] |
7.8 |
8 |
6.3 |
(19.2%) |
(21.3%) |
|
| MoU (minutes) |
153.5 |
157.5 |
167.0 |
8.8% |
6.0% |
|
| Average Revenue per User(ARPU) in US$ | ||||||
| Total |
2.6 |
2.5 |
2.6 |
— |
4.0% |
|
| Active (3 months) |
3.8 |
3.7 |
4.3 |
13.2% |
16.2% |
|
| Revenue (UAH million) |
730.7 |
709.3 |
670.6 |
(8.2%) |
(5.5%) |
|
| Revenue (US$ million) |
93.2 |
89.5 |
84.9 |
(8.9%) |
(5.1%) |
|
| EBITDA[2] (US$ million) |
7.4 |
20.3 |
21.5 |
190.5% |
5.9% |
|
| EBITDA margin |
7.9% |
22.7% |
25.3% |
17.4pp |
2.6pp |
|
| Net Loss (US$ million) |
(42.5) |
(17.1) |
(26.4) |
(37.9%) |
54.4% |
|
| Capex (US$ million) |
31.9 |
12.9 |
5.0 |
(84.3%) |
(61.2%) |
[1] Active subscribers are those who in the past three months made a transaction which brought revenue to the Company.
2 EBITDA is a non-GAAP financial measure.
The Ukrainian GSM operator life:) that serves 9.8 million subscribers as of Q3 2010 is providing simple, easy to use, value for money communication services that satisfy the customers’ needs and build stronger communities throughout the country.
life:) network covers the territory where 96% of population lives. life:) provides roaming opportunities in 172 countries via 468 roaming partners. The operator was the first to introduce EDGE technology that offers high speed data transfer. Now the technology is enabled in 100% life:) network.
488 life:) customer care centers and exclusive sales points operate in 185 cities of the country. In addition to that, life:) subscribers can order life:) services through 34,600 non-exclusive shops.
