COMMENTARY: Very good results for Vipnet

Business results of Vipnet, the second-largest domestic telecom operator, published as part of the results of its owner Telekom Austria, are very good if one considers that the economic situation has not drastically improved, that the roaming prices are still decreasing, which has a large seasonal effect in the second and especially in the third quarter. The growth in revenue and profit, and good results in terms of revenues from customers in fixed and mobile telephony, as well as growing number of users in all segments of the fixed business, show that the second largest mobile operator is on the right track.

Such results were to be expected, because 2016 was the first year with fully integrated operations of Amis Telekom in Vipnet, while a similar trend will continue this year as well because a few days ago, Vipnet received permission from the Competition Agency for the acquisition of a majority stake in Metronet.

As for mobile telephony, Vipnet stagnated in the market share segment, that is it remained unchanged. However, the total number of users in mobile telephony dropped by minimal 0.8 percent. In addition to this, one should take into consideration that Vipnet decided to strengthen the segment of ICT services and solutions. Unfortunately, Vipnet's business results do not show this segment, but the acquisition of Metronet, which is focused on business customers and ICT solutions proves it once again. Completion of Metronet acquisition and consolidation of operations into Vipnet are expected by the end of the first quarter of this year.

We should not forget that Vipnet recently completed the upgrade of its data center and entered the internal market of Telekom Austria more strongly with its solutions, but also stepped into the domestic market of cloud services and solutions.

Telekom Austria's report also states there are very positive trends in the operations in Croatia, even though the business was affected by the further decrease in roaming prices. But, it should be noted that roaming charges should disappear later this year which will certainly have an impact on the business in 2017.

Maybe it's a bit worrying that this year Vipnet slowed down its capital investments, particularly evident in the last quarter, so that the year ended with a minimal increase in capital investments by 5.4 percent.