COMMENTARY: Solid HT's results

Finally, the last results are here of telecom operators' business in the first quarter of this year. While the strongest telecom and former monopolist realizes solid revenue under strict regulatory control, it is apparent on the market that the two largest ones, i.e. HT (Reuters: HT.ZA; Bloomberg: HTRA CZ) and Vipnet, profit from the revenue consolidation of Crnogorski Telekom and Metronet.

Specifically, in the first quarter, HT adds into the consolidated results operations of Crnogorski Telekom, which it recently acquired from Magyar Telekom, which is, like HT, also owned by Deutsche Telekom. Vipnet, on the other hand, consolidated business of Metronet, domestic telecom previously owned by funds and companies such as King ICT. Now, it is evident that Vipnet holds 97.9 percent, while the remaining 2.1 percent is owned by Tomislav Matić, who was a man of trust of Borislav Škegro.

Now, after this reshuffle in Croatia, while it is still not clear if and when will Optima telekom incorporate H1 Telecom, which would give management of H1 Telekom to HT as well, it is evident that the market doesn't hold much room for growth.

Therefore, HT's business results with and without consolidation of Crnogorski Telekom show stable business, growth of profit and other key indicators. It should also be taken into account that HT, as the largest market operator, has an interest in protecting the market position especially in segments where it is not under strict regulatory control.

However, it is quite clear on the telecom market that there will be very fierce race for customers, new tariffs and services, and it will be interesting to see how Tele2, Vipnet, and HT will respond to the challenges.

Let us go back to HT's results, which show that Iskon continues to grow, while Combis has pretty much came up short when it comes to business results in the first quarter of this year. According to information ICTbusiness.info has, it is due to the fact that the first quarter of 2016 was surprisingly good because of the overflow of the part of the revenue from 2015.

Hrvatski Telekom continues to invest heavily and capital investments are up by 16.6 percent, including the contribution of Crnogorski Telekom. Without this effect, the realization of capital investments in the first quarter increased by 9.7 percent compared to the same period last year and amounts to HRK 344 million, which is still twice as high as all the operators together, as HT likes to boast.

Therefore, when one looks at HT's overall results for the first quarter, it is clear that the company has stable business, that in some key indicators they grew without any impact of the takeover of Crnogorski Telekom, which is certainly encouraging.