ROSTELECOM PJSC

 

rostelecom announces its ifrs financial and operating results

for the first quarter of 2019

 

DIGITAL SEGMENT[1] GROWTH OF 10%; 12% INCREASE IN OIBDA[2]; NET PROFIT UP 46%

Moscow, Russia - May 15, 2019 - Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest digital service provider in Russia, today announces its consolidated financial results for the first quarter of 2019 prepared in accordance with IFRS[3].

KEY ACHIEVEMENTS

• Revenue grew by 3% year-on-year in the first quarter of 2019 despite a high comparable base due to non-recurring items reported in the first quarter of 2018; revenue was up 6% on a like-for like basis;
• The digital segment sales increased by 10% in the reporting quarter, while its contribution to total revenue reached 56%;
• OIBDA grew by 12% in the first quarter of 2019 to RUB 26.4 billion;
• Net profit increased by 46% in the first quarter of 2019 to RUB 5.6 billion;
• The retail customer segment, which accounts for 45% of the Company's revenues, demonstrated the best dynamics having increased by 3.4% year-on-year; other business segments also grew by 3% year-on-year;
• Consistently growing ARPU across broadband and IPTV segments.

 

FIRST QUARTER 2019 FINANCIAL HIGHLIGHTS

• Revenue grew by 3% to RUB 78.7 billion compared to the first quarter of 2018;

• OIBDA up by 12% to RUB 26.4 billion;
• OIBDA margin grew by 2.6 p.p. to 33.5% compared to the first quarter of 2018;
• Net profit increased by 46% to RUB 5.6 billion compared to the first quarter of 2018;
• CAPEX[4] increased by 48% to RUB 22.3 billion (28.4% of revenue) from RUB 15.1 billion (19.8% of revenue) in the first quarter of 2018;
• Free Cash Flow (FCF) of RUB (14.6)[5] billion compared to RUB (5.8) billion in the first quarter of 2018;
• Net debt[6] increased by 12% since the beginning of the year to RUB 208.4 billion, resulting in a Net Debt/OIBDA ratio of 2.0x.

 

Key figures for 1Q 2019, RUB mln

RUB million	1Q 2019	1Q 2018	change, y-o-y
Revenue	78,667	76,203	3%
OIBDA	26,381	23,551	12%
OIBDA margin %	33.5%	30.9%	-
Operating Income	9,709	8,357	16%
Operating margin %	12.3%	11.0%	-
Net Income	5,631	3,864	46%
% of revenue	7.2%	5.1%	-
Capital Expenditure	22,343	15,125	48%
% of revenue	28.4%	19.8%	-
Net debt	208,369	191,788	9%
Net debt/ annualised OIBDA	2.0	1.9	-
FCF	(14,583)	(5,848)	(8,735)

 

Mikhail Oseevskiy, President of Rostelecom, commented:

"The strong first quarter of 2019 came in line with our expectations, resulting in growth across key financial indicators. Total revenue increased by 3%, but one of the most significant achievements this quarter was the significant improvement in OIBDA, up 12%, growth in OIBDA margin by 2.6 percentage points to 33.5% and a 46% increase in net income. These achievements were mainly driven by the expansion of our digital services ecosystem across key client groups and an increase in revenues per user. We remain committed to the digital transformation of our business with digital and content services forming the basis of our strategy. The team has set ambitious priorities and we are proud of our leading positions in our key markets.

Rostelecom continues to use its network infrastructure to launch the type of innovative digital services that are transforming the Company. Last month we introduced Rostelecom Health, a mobile app and website that provides quick, online around-the-clock medical consultation with GPs and specialist doctors, available by appointment. Our new service allows our clients to seek expert medical help from a GP or Doctor via an online chat or videocall, any day of the week and anywhere, this way avoiding travelling and queues. Individual and family schemes are available within the new platform so to enable users to take care of their loved ones.

We have also continued to expand our "Smart Home" offering, completing the sale of 100,000 cameras for cloud-based home surveillance systems that enable customers to monitor their properties from any part of the world.

We are gaining industry recognition for delivering cloud-based services. We were ranked number one by TMT Consulting for the number of hosted PBX clients in 2018, a year in which Rostelecom's market share more than doubled from 11% to 24%. Among key factors contributing to our successful promotion of the hosted PBX service, apart from the "Plus Account" offer, are our omni-channel tactics to attract new clients, tailored approach to targeting and advertising in each region, as well as a transparent and straightforward pricing, underpinned by the multifunctional nature of the service.

We remain committed to delivering on our digital strategy, developing digital solutions and friendly ecosystems of services while investing in human capital. Our superior network infrastructure and highly motivated team will continue to underpin our leading positions in providing digital services to all types of clients."

Sergey Anokhin, Senior Vice-President and Chief Financial Officer, added:

"Rostelecom's results for the first quarter of 2019 reflect our confident outlook for the future development of the digital segment. In addition to expanding our digital segment, we are introducing measures aimed at improving internal efficiency. We expect our performance to continue to improve across all key financial indicators. Therefore, we reiterate our guidance for the full year of 2019 and we anticipate an increase in revenue and OIBDA of no less than 2.5%, based on CAPEX of RUB 65-70 billion, including the regulatory CAPEX amounting to RUB 7 billion, excluding the implementation of government programmes."

 

KEY OPERATING HIGHLIGHTS

Number of subscribers (million):	1Q 2019	1Q 2018	change, y-o-y	4Q 2018	change, y-o-y
Internet access	13.0	12.9	0.5%	13.0	(0.1%)
B2C: Broadband	12.0	12.0	0.1%	12.0	(0.1%)
B2B: Broadband + VPN	1.0	1.0	5%	1.0	(1%)
Pay TV	10.2	9.9	3%	10.2	0.2%
Incl. IPTV	5.4	5.0	8%	5.3	1%
MVNO subscribers	1.3	0.9	43%	1.2	6%
Local telephony services	17.0	18.7	(9%)	17.4	(2%)

 

ARPU[7] (RUB):	1Q 2019	1Q 2018	change, y-o-y	4Q 2018	change, y-o-y
Internet access
B2C: Broadband	397	376	6%	392	1%
B2B: Broadband + VPN	3,266	3,029	8%	3,160	3%
Pay TV (B2C)	249	238	5%	251	(1%)
Incl. IPTV	317	308	3%	328	(3%)
Blended ARPU[8]	543	510	7%	549	(1%)

 

 

 

 

 

Total subscriber base and ARPU

1. The total number of B2C Internet subscribers grew by 0.1% to 12.0 million in the first quarter of 2019 compared to the corresponding period of last year; ARPU was up 6% year-on-year to RUB 397.
2. The total number of B2B Internet and VPN subscribers increased by 5% year-on-year to 1.0 million; ARPU grew by 8% year-on-year to RUB 3,266.
3. The number of pay-TV subscribers grew by 3% to 10.2 million households compared to the corresponding period of last year with ARPU of RUB 249, up 5% year-on-year;

• The number of IPTV subscribers increased by 8% to 5.4 million with ARPU of RUB 317;

4. The number of MVNO subscribers increased by 43% and reached 1.3 million users;
5. The number of local telephony subscribers decreased by 9% to 17.0 million.

 

 

KEY EVENTS RELATING TO 1Q 2019 AND AFTER THE END OF THE REPORTING PERIOD

Business news

• Rostelecom continues to develop and expand its range of products and services:

• A new offer "For friends" was made available for new and existing clients from 1 March 2019: for RUB 199, clients can enjoy faster Internet speed and choose between mobile communication, IPTV, video surveillance service or the e-learning platform;
• As part of the "Gaming" tariff plan, Rostelecom renewed the set of bonuses for new game weapons (Warface option) and launched a website with all available options - www.gg.rt.ru;
• Jointly with Sberbank, Rostelecom launched a loyalty programme "Exchange "THANK YOU" on WINK";
• The Company launched direct sales of ESET antivirus solutions (bypassing aggregator platforms), as well as sales of antivirus products by its subsidiary company "Bashinformsvyaz";
• A new pilot service to provide remote IT assistance through user's personal online area was launched in Rostelecom's offices across the "South" regional network;
• A new service "Guarantee+" was introduced to protect clients from financial losses for user equipment damage. The warranty also covers power strikes, leaks from neighbouring properties or attributed to public utilities, fire, hooliganism or theft;
• A new digital service "Rostelecom Taxes" and a website www.nalog.rt.ru were launched on a pilot basis, allowing clients to draft tax statements and apply for a tax deduction;
• As part of the "Smart Home" ecosystem:
  • new tariff plans were launched within its home video surveillance service, including "Continuous recording" and "FullHD" (high-quality recording);
  • introduced a new offering "Video for 350";

Within the MVNO project development the Company introduced convergent-offer across all offices within the "Ural" regional network;

• Rostelecom continues to grow its digital segment:

• Rostelecom was ranked number one by the number of hosted PBX clients in the 2018 TMT Consulting Rating; the Company's market share more than doubled to 24% from 11%;
• Rostelecom, Tele2 and Nokia successfully completed testing Internet of Things (IoT) utility solutions for households, based on Russian network infrastructure;
• Rostelecom launched a new digital service 'Rostelecom Health' - a mobile application and website for online around-the-clock medical consultation with GPs and specialist doctors, available by appointment.  

• Rostelecom generated a two-fold growth of revenues from its O2O[9] project in the first quarter of 2019;
• Within the contract with Vodafone, Rostelecom put the Hong-Kong-Frankfurt channel with 100Gbps capacity into commercial operation;
• The Company commissioned 6 distributed radio access points (ADAS) in remote areas.

Other news

• The Board of Directors of Rostelecom approved a revised dividend policy to amend free cash flow ("FCF") methodology for dividends calculation. The amended FCF has been increased by subsidy from government;
• Rostelecom paid an interim dividend for 9 months of 2018 of RUB 2.5 per ordinary share;
• The Company acquired Infolink Group of companies, one of the leading Internet services providers in the Chuvash Republic.
• In March 2019, Rostelecom announced the placement of bonds at a coupon rate of 8.45% per annum. The bonds' total nominal value is of RUB 15 billion.
• The Analytical Credit Rating Agency (ACRA) assigned an AA(RU) credit rating to the RU000A100881 bond issued by Rostelecom.

 

OPERATING REVIEW

Revenue analysis

 

Revenue structure by services

RUB million	1Q 2019	1Q 2018	change
Broadband	20,938	19,183	9%
TV services	9,293	8,175	14%
Fixed telephony	16,087	18,283	(12%)
Wholesale services	20,387	19,399	5%
Rent of channels	2,386	2,297	4%
Interconnect and traffic transit services	8,435	8,376	1%
VPN	6,100	5,524	10%
Rent and maintenance of telecommunications infrastructure	3,465	3,203	8%
VAS and cloud services	7,653	7,237	6%
Other telecommunications services	2,817	2,610	8%
Other non-telecommunications services	1,491	1,317	13%
Total	78,667	76,203	3%

Revenue structure by customer segments

RUB million	1Q 2019	1Q 2018	change
Residential customers	35,247	34,086	3%
B2B / State clients	27,931	27,074	3%
Operators	14,402	13,986	3%
Other	1,087	1,058	3%
Total	78,667	76,203	3%

 

 

In the first quarter of 2019, revenue increased by 3% to RUB 78.7 billion, compared to the first quarter of 2018, as a result of the following factors:

• a 9% increase in revenue from broadband services due to a higher number of subscribers and higher ARPU;
• a 14% increase in revenue from pay-TV services due to growth in the IPTV subscriber base and higher ARPU;
• a 10% increase in revenue from VPN services, mainly due to higher demand from state clients;
• a 6% increase in revenue from VAS and cloud services, mainly due to the proceeds from "Smart City" projects, the promotion of cloud services and data-centres. The modest comparable growth dynamics of this business segment is mainly due to a higher base in the first quarter of 2018 on the back of the one-off project to provide video surveillance during the presidential election in Russia. Excluding the one-off project effect, the increase in revenue from VAS and cloud services was 46%.

Operating income analysis

Operating expenses structure

 

RUB million	1Q 2019	1Q 2018	change
Personnel costs	(25,310)	(24,485)	3%
Depreciation, Amortization and impairment losses	(15,506)	(14,078)	10%
Interconnection charges	(14,233)	(14,144)	1%
Materials, repairs and maintenance, utilities	(6,469)	(6,338)	2%
Gain on the disposal of PPE and intangible assets	657	418	57%
Impairment loss of financial assets measured at amortized cost	(1,121)	(1,275)	(12%)
Other operating income	3,799	3,585	6%
Other operating expenses	(10,775)	(11,529)	(7%)
Total operating expenses	(68,958)	(67,846)	2%

In the first quarter of 2019, operating expenses increased by 2% compared to the corresponding period of 2018 and amounted to RUB 69.0 billion, largely due to the following factors:

• a 10% increase (of RUB 1.4 billion) in depreciation, amortization and impairment losses, due to a reduced effect from revised terms of useful life and higher payments associated with new objects and intangible assets following the acquisition of additional software and content;
• a 3% increase (of RUB 0.8 billion) in personnel costs, mainly due to an increase in the number of employees within the digital business segments, in part through newly acquired subsidiary companies;
• a 7% decrease (of RUB 0.8 billion) in other operating expenses, mainly due to the legislative amendments to corporate property tax, as well as higher base in the first quarter of 2018 due to higher additional expenses related to providing video surveillance during the presidential election in Russia.

Operating profit increased by 16% year-on-year to RUB 9.7 billion in the first quarter of 2019, compared to the corresponding period of 2018.

OIBDA for the first quarter of 2019 increased by 12% year-on-year to RUB 26.4 billion. OIBDA dynamics were driven by revenue growth and the above-mentioned factors, affecting operating expenses. The OIBDA margin increased by 2.6 p.p. to 33.5% in the first quarter of 2019 compared to the corresponding period of 2018.

Net Income Analysis

In the first quarter of 2019, profit before tax increased by 41% to RUB 6.9 billion, compared to the corresponding period in 2018.

These dynamics were influenced by the following factors:

• higher operating profit;
• improved associated companies' financial results, mainly from the joint venture with Tele2 Russia;
• higher financial expenditure, including due to an increase in interest payments.

Income tax in the first quarter of 2019 increased by 24% to RUB 1.2 billion.

The effective income tax rate was at 18% in the first quarter of 2019, compared to the 20% rate set by the Tax Code.

Net profit increased by 46% in the first quarter of 2019 and totalled RUB 5.6 billion.

Financial review

Net operating cash flow in the first quarter of 2019 decreased by 22% and amounted to RUB 6.5 billion, compared to the corresponding period of 2018. The decrease in net operating cash flow in the first quarter of 2019 was mainly due to changes in working capital, which was partly driven by an bigger increase in accounts receivable, a bulk of which is expected to be paid in the second quarter of 2019.  The decrease in net operating cash flow was also driven by a smaller increase in accounts payable in the reporting period.

Cash outflow for investments in non-current assets increased by 48% to RUB 22.3 billion (28.4% of revenue) in the first quarter of 2019. Excluding state programmes, it increased by 31% to RUB 16.4 billion (20.8% of revenue). These dynamics reflect an increase in capital expenditure on government-funded programmes during the reporting period, as well as the uneven distribution of expenditure during a calendar year according to the terms of the concluded contracts.

Free cash flow in the first quarter of 2019 totalled RUB (14.6) billion compared to RUB (5.8) billion in the first quarter of 2018.

 

 

 

Free Cash Flow (RUB, billion)

As at March 31, 2019, the Group's total debt increased by 9% compared to the beginning of the year and amounted to RUB 222.2 billion. Over 99% of the Group's total debt was rouble-denominated as at March 31, 2019.

As at March 31, 2019, the Group's net debt increased by 12% compared to the beginning of the year and amounted to RUB 208.4 billion. The net debt /OIBDA ratio stood at 2.0x at 31 March 2019.

OTHER INFORMATION: CONFERENCE CALL

Rostelecom's management will hold a conference call and webcast today at 4.00 PM (Moscow), 3.00 PM (CET), 2.00 PM (UK) and 9.00 AM (NYT). To participate in the conference call, please dial:

UK/ International:  +44 (0) 330 336 9126

USA:    +1 646 828 81 44

Russia:     +7 495 213 1767

 

Confirmation Code (ENG):  4194015

Confirmation Code (RUS):  1553968

 

 

A webcast of the conference call will only be available in English. To access the webcast please follow the link: https://webcasts.eqs.com/register/rostelecom20190515/en.

 

A replay of the conference call will be available on the Company's website  https://www.company.rt.ru/en/ir/results_and_presentations/financials/IFRS/2019/1/.

 

* * *

 

APPENDICES

1. Reconciliation of OIBDA;
2. IFRS 9, 15 and 16 standards application;
3. Statement of Comprehensive Income for the three months of 2019;
4. Statement of Cash Flows for the three months of 2019;
5. Statement of Financial Position for the three months of 2019.

 

 

APPENDIX 1: RECONCILIATION OF OIBDA

OIBDA is a non-U.S. GAAP and non-IFRS financial measure, which the Company defines as operating income before depreciation and amortisation as well as some certain expenses. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt.

The following indicators are not taken into account in the calculation of OIBDA:

• Expenses related to the long-term management incentive programme, implying accruals in personnel costs line starting from Q2, 2014;
• Expenses related to non-government pension insurance starting from Q3, 2018.

 

RUB million	1Q 2019	1Q 2018	change
Operating income	9,709	8,357	16%
Plus amortisation	15,506	14,078	10%
Plus expenses related to the long-term management incentive programme	887	758	17%
Plus expenses related to non-government pension insurance	279	358	-
OIBDA	26,381	23,551	12%
OIBDA margin, %	33.5%	30.9%

 

APPENDIX 2: IFRS 9, 15 and 16 STANDARDS APPLICATION

 

The Group initially adopted IFRS 9, 15 and 16 using the modified retrospective approach starting from the first quarter of 2018. The key changes related to the application of these standards are listed below:

 

•     Expenses related to the operating leases have been capitalized and are reflected in the accounting balance sheet under the title "Right-of-use assets (RoU)". The RoU related liabilities are reflected in relative balance lines under same titles;
•     The expenses related to the conclusion and implementation of contracts with customers have been capitalized and are reflected under "Revenue from Contracts with Customers";
•     Assets for contracts with customers in arrears on payments for services rendered, but yet not invoiced, were excluded from the accounts receivable balance;
•     Revenues from the sale of goods or provision of services of not sufficient individual value to customers, have been deferred;
•     Recurring advances, containing the financing component, have been discounted;
•     Impairment provisions of financial assets are recognised on the basis of expected credit losses.

APPENDIX 3: Statement of Comprehensive Income for the three months of 2019

 

		Three-month period ended 31 March (unaudited)
	2019		2018
Revenue	78,667		76,203
Operating expenses
Wages, salaries, other benefits and payroll taxes	(25,310)		(24,485)
Depreciation, amortization and impairment losses	(15,506)		(14,078)
Interconnection charges	(14,233)		(14,144)
Materials, utilities, repairs and maintenance	(6,469)		(6,338)
Gain on disposal of property, plant and equipment and intangible assets	657		418
Impairment loss of financial assets measured at amortized cost	(1,121)		(1,275)
Other operating income	3,799		3,585
Other operating expenses	(10,775)		(11,529)
Total operating expenses, net	(68,958)		(67,846)
Operating profit	9,709		8,357
Share of net profit/(loss) of associates and joint ventures	998		4
Finance costs	(4,575)		(4,054)
Other investing and financial gain, net	313		565
Foreign exchange gain/(loss), net	420		(9)
Profit before income tax	6,865		4,863
Income tax expense	(1,234)		(999)
Profit for the period	5,631		3,864
Other comprehensive income/(loss)
Other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods
Exchange differences on translating foreign operations, net of tax	(225)		3
Other comprehensive income/(loss) for the period, net of tax	(225)		3
Total comprehensive income for the period	5,406		3,867
Profit attributable to:
Equity holders of the Group	5,460		3,703
Non-controlling interests	171		161
Total comprehensive income attributable to:
Equity holders of the Group	5,222		3,707
Non-controlling interests	184		160
Earnings per share attributable to equity holders of the Group - basic (in roubles)	2.38		1.65
Earnings per share attributable to equity holders of the Group - diluted (in roubles)	2.32		1.61

 

 

APPENDIX 4: Statement of Cash Flows for the three months of 2019

 

 

APPENDIX 5: Statement of Financial Position for the nine months of 2018

 

PJSC Rostelecom is the largest digital service provider, operating in all segments of the telecommunications market in Russia, it serves millions of households, the state and private enterprises across the country.

Rostelecom is Russia's undisputed market leader, providing high-speed Internet access to over 13 million families and pay-TV services to more than 10.2 million families, over 5.4 million of which are subscribed to Rostelecom's IPTV services on a national level. Rostelecom's MVNO base is over 1.3 million users. The Company develops digital solutions for smart homes, online education, telemedicine and other services.

In the first three months of 2019, the Group generated RUB 78.7 billion of revenues, RUB 26.4 billion of OIBDA (33.5% of revenue) and RUB 5.6 billion of net income.

The Group is the leading provider of telecommunications services to government bodies and corporates of all levels with more than 1.0 million legal entities currently using Rostelecom's high-speed Internet services and VPN.

Rostelecom is a key strategic innovator that provides solutions in the following fields: E-Government, cybersecurity, data-centers and cloud computing, biometry, healthcare, education and housing & utility services.

The Group's stable financial position is confirmed by its credit ratings. Rostelecom has been assigned 'BBB-' and 'BB+' international credit ratings by Fitch Ratings and Standard&Poor's respectively, and AA(RU) by ACRA.

 

*   *   *

Certain statements in this press release are forward-looking statements within the meaning of the U.S. federal securities laws and intended to be covered by the safe harbours created thereby.

Those forward-looking statements include, but are not limited to:

• Assessment of PAO Rostelecom's (the Company) future operating and financial results as well as forecasts of the present value of future cash flows and related factors;
• The Company's plans to take ownership stakes in other organisations;
• the Company's anticipated capital expenditures and plans to construct and modernize its network;
• the Company's expectations as to the growth in demand for its services, plans relating to the expansion of the range of its services and their pricing;
• the Company's plans with respect to improving its corporate governance practices;
• the Company's expectations as to its position in the telecommunications market and forecasts on the development of the market segments within which the Company operates;
• economic outlook and industry trends;
• the Company's expectations as to the regulation of the Russian telecommunications industry and assessment of impact of regulatory initiatives on the Company's activity;
• other statements regarding matters that are not historical facts.

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:

• risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;
• risks relating to Russian legislation, regulation and taxation, including laws, regulations, decrees and decisions governing the Russian telecommunications industry, securities industry as well as currency and exchange controls relating to Russian entities and their official interpretation by regulatory bodies;
• risks relating to the Company, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Company's services including their promotions, and the ability of the Company to remain competitive in a liberalized telecommunications market;
• technological risks associated with the functioning and development of the telecommunications infrastructure, technological innovations as well as the convergence of technologies;
• other risks and uncertainties. For a more detailed discussion of these and other factors, see the Company's Annual Report and the Company's other public filings.

Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, readers are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which are made as of the date hereof) to reflect events or circumstances upon the annual report publication or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.

 

[1] Broadband + Pay TV + VAS and cloud services.

[2] Here and below, please refer to Attachment 1 of this statement for a full definition of OIBDA. Note that the company changed the methodology of OIBDA calculation since 3q 2018 by excluding expenses related to non-government pension insurance. Historical OIBDA numbers for 2018 were recalculated in line with the renewed methodology.

[3] International financial reporting standards.

[4] Here and below, capital expenditure ("CAPEX") comprises cash spent on fixed assets and intangible assets.

[5] Here and below, starting from 2019, Free Cash Flow (FCF) is calculated as net cash from operating activity minus CAPEX, plus proceeds from selling fixed assets and intangible assets, plus interest received, plus subsidy from government. Comparative statements of 2018 are given as they were disclosed in the corresponding period.

[6] Here and below, Net Debt is calculated as total debt less cash, cash equivalents and short-term investments (other financial assets).

[7] Average revenue per user

[8] Blended ARPU includes revenue from broadband, IPTV and digital cable TV

[9] Operator to Operator