BASE Company closes third quarter with solid operational results offset by competitive market

Brussel, (PresseBox) - .
- Underlying service revenues decreased by 7.1%, impacted by competitive mobile market
- Strong operational results after new mobile propositions launched in Q2, 46k postpaid net adds
- Decrease postpaid churn, back to levels before competitive movements
- First position in voice quality and a joint number one position in data quality in the NetCheck network test
- Launch commercial 4G offer in 15 cities beginning of October

BASE Company today published its results for the third quarter 2013

CEO Jos Donvil commented: "BASE Company is taking the lead in 2013. In Q1 we launched our SNOW offer to challenge the fixed market. In Q2 we changed our BASE tariff plans and on top of that we increased our network speed with 3G Dual Carrier. In Q3 we changed our name to BASE Company and launched 4G as the second telecom operator in Belgium immediately in 15 cities. And on top of that we have the best Net Promotor Score[1] (NPS) score and the best voice network confirmed by NetCheck[2]".

FINANCIAL DETAILS

Underlying revenues and other income in Belgium decreased by 4.7% y-on-y in Q3 2013. Underlying service revenues decreased by 7.1% y-on-y due to continued price pressure caused by a competitive mobile market. Underlying EBITDA declined by 30% y-on-y due to lower revenues and higher commercial costs to promote BASE Company's propositions resulting in an underlying EBITDA margin of 26.0% (Q3 2012: 35.3%).

The new mobile propositions introduced in Q2 2013 are delivering strong operational results, despite continued strong competition. This resulted in 46k postpaid net adds (Q3 2012: -3k) realized through attractive offers and supported by marketing campaigns. Prepaid net adds of -61k in Q3 2013 were impacted by the annualizing effect of last year's campaign. Postpaid ARPU was lower y-on-y at EUR 34 (Q3 2012: EUR 42) impacted by regulation and increased competition, while prepaid ARPU increased to EUR 9 (Q3 2012: EUR 8).

OPERATIONAL HIGHLIGHTS

We continually strive to be a leader in Customer Experience. This was evidenced by the fact that the BASE brand obtained the highest Net Promoter Score1 (NPS) compared to competition. As a result of this and the attractive offers, postpaid churn has been brought back to levels before the start of the competitive movements on the market last year.

The significant investments in the network infrastructure resulted in a number one position in voice quality and a joint number one position in data quality in the NetCheck2 network test. On top of the leading network position in voice BASE Company's 2nd overall position for its 3G network quality was confirmed by the independent consumer organization Testaankoop.

KPN Group Belgium changed its name to BASE Company on the 1st of August and introduced a number of new customer propositions beginning of April, offering new tariff plans for both B2C and B2B customers. Next to the new product portfolio customers can also experience increased speeds through the further roll-out of the 3G dual carrier (83% of population today versus 61% at launch in Q2) and the commercial launch of the BASE 4G network that was launched in 15 cities on 1 October 2013. BASE Company aims to have the majority of the Belgian population covered with 4G at the end of 2014.

BASE Company and Tech Mahindra announced in August the conclusion of a five year managed service agreement for the operations and roll-out of the BASE Company network in Belgium. With this agreement BASE Company is broadening its partnership with Tech Mahindra (after the agreement about IT systems), creating highly efficient network operations, where a managed service partner is responsible for both network and IT.

COMMERCIAL DEVELOPMENTS

BASE Company continues to be a challenger of the fixed telecom market with its product SNOW. The September media campaign (on TV, radio and online) and the continuous investments in the quality resulted in further growth of the SNOW subscriber base.

On 8 October 2013, BIPT announced that BASE Company is one of the three operators having the opportunity to participate for three 800MHz spectrum licenses in the upcoming Belgian frequency auction.

About BASE Company

BASE Company is a fully-owned subsidiary of Royal KPN N.V., whose headquarters are located in Brussels. At the end of December 2012, BASE Company recorded a ~20% service revenue market share. In 2012, the company's total revenues amounted to EUR 804 million in Belgium, with an EBITDA of EUR 272 million and 895 employees. The company is mainly active in the field of mobile telephony via the brands BASE and BASE business. It also provides digital television, Internet and fixed telephony services through its SNOW brand. BASE Company follows a segmented customer targeting approach and distributes its products and services via 75 BASE shops, 80 ALLO shops, online and indirect channels.

[1] Source: customer satisfaction study BASE brand, June 2013

[2] Source: NetCheck 1st half-year 2013

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