freenet AG (FNTN) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the conference call of freenet AG. At our customers' request, this conference will be recorded. [Operator Instructions] May I now hand you over to Mr. Vilanek, who will lead you through this conference? Please go ahead.

Hello, ladies and gentlemen, a warm welcome this morning for our first half year results 2021. A warm welcome to everybody. We get started. As always, you have hopefully our presentation in front of you or you can follow it on the screen. We are happy and proud to present a very strong performance for the first 6 months of 2021. I think my headline is that the transformation that we have entered into a couple of years ago finally leads into growth again. We see a very positive development on all adjacent TV and Media businesses, but the combination with this also strong and kind of rehabilitating mobile business is driving the performance. And not only that, it also drives the fact that, as you have all seen from the release, we are also comfortable to increase the prognosis for the full year. Going into some detail, the total subscriber base of full committed contract is growing by almost 200,000 year-over-year, 190,400 to be precise. The EBITDA is on a level of EUR 222.3 million as of 30th of June 2021, a growth of plus EUR 8.4 million, mainly in absolute terms growing from the TV and Media business, but as a layer, having a stable mobile business. And free cash flow is also going up. And that is kind of cleared from the Sunrise dividend and related interest payments. And Ingo Arnold will give more details on this. What were the main topics that kept us busy over the last 6 months? Well, I mean, retail was suffering from the lockdown. But the recovery is visible for the last 2 months. In June, we were already back up in normal term -- almost normal terms. Nevertheless, it's great that our retail independent partners have given us a very good award on our performance. We have launched the first sustainable product line with GRAVIS. Networx is our -- for many years, our internal brand. We have added Greenline, which is now sustainable products. And sustainability is not only a buzzword, it's something which we will also show in the second half of this year in a broader scale. And as already mentioned, in July, we've seen a regular performance in all our retail channels, doing really great again after the long lockdown. On the TV and Media side, I think the key decisions that we made were -- one was on EXARING, we have decided to stop the ownership -- the full ownership on our own network, turned out that technology squeeze over the past 5 years showed that we will now be able to run our own network on certainly fully leased lines but even more efficient than to run our own ones. This will be in place from early 2022. The other thing what we've seen is that the Media Broadcast is gaining more and more of these DAB licenses, not only the national one but also on a federal level of Northern Westphalia, Hamburg and Saarland. So also their B2B business is doing properly. And they also see some first indications of service contracts on 5G campus and alike services. On a group level, the share buyback continues. We have so far spent about EUR 75 million, so about 5% of the shares held as of end of July were in our own ownership. And once again, Ingo will give some more details. We have done obviously the dividend payout. And overall, also on the pandemic side, I think we've done well. To give you a flavor, we have had, in total, 108 cases from the beginning. We have only had 1 a bit more severe case. And even this person has recovered. We have vaccinations on all -- at all locations. And we have made an offer to all our employees to be vaccinated. If we go back to the day-to-day numbers -- and as always, we break it down on the next couple of pages. But an overview, postpaid growing; the pure app-based tariff plan, significantly growing; waipu growing as well. And on freenet TV, as we go, as I said, in more details on the following pages, slows down its customer losses, nevertheless, makes more EBITDA and profit on the remainder ones. Page #7, you can see the high-margin mobile customer overall development. Year-over-year, a growth of 210,000 or 3%. Even in these rather difficult and limited quarters of the pandemic and the uncertainty around it, we were able to grow once again on a quarterly basis. We're very happy about that. The non-retail/retail remains at the typical level, I mean, this is about 60% is non-retail, 40% is retail. So it has come down year-over-year. Certainly, as we accelerate it, then I would expect for Q3 and 4, a slightly different ratio. As we can see here, the positive thing is that captive channels is still growing. Nevertheless, I have to admit that also this number, I expect for Q3 and Q4 look a bit different due to the fact that one driver was certainly Media-Saturn being under specific pressure and it also has dramatically recovered from the reopening. So I expect this number to go -- the 27%, to go up again at least a bit. On freenet TV, we keep saying that we run the company based on EBITDA and specifically gross margin. And at the end of the day, EBITDA, you can see here in a comparison, EBITDA from first 6 months 2020 to '21, we had almost 50% growth based on the 2020 numbers. And you can also see down there, we want to be super transparent here that the quarterly losses, if you want to say so, are going down. I mean, in absolute terms, it was 33,000 in Q1 and now it's 23,000. So it's not only a percentage point but also in absolute terms doing really, really well. On the right-hand side, we have listed three dots around the B2B business. One was the regional DAB+ platforms, which I've already mentioned. The second one is, once again, we have won the Bundesliga transportation of the signals to the main channels, which is a quite prestigious thing and creates trust in the market that we are able and capable to run technical, quite challenging things. And the 5G campus that we have opened close to Berlin has proof of concept running during the European Championship, the 5G connectivity for the headquarter of the national team. Next page, Page #9, which is waipu. Once again, you can see here that we've done a good proportion of growth once again. I think Q2 did really, really well. We know from last year that Q3 is always a bit challenging -- the challenging period. I think we're going to see the same again this year. Looking at the July and mid-August numbers, it's just a result of summer period low advertising from our side but also low interest in motion pictures entertainment overall. In total, we feel really comfortable with the development. Nevertheless, we are already here, mentioned before, that we go for a good balance on growth and profit. We could certainly be more aggressive in growth, but that would lead into more aggressive offers. And we think it is more appropriate to do straightforward offers, no long free trial periods, et cetera, et cetera. And these numbers are, therefore, very, very solid and will remain on that level. If I look personally on the second half of the year, on mobiles, we have -- we are about to change the internal organization, even more directed to customer lifetime value. We are reorganizing the tasks even within the Executive Board. I myself will focus on what we call customer interactions, so it's anything that is directed and directly to the end consumer, being telemarketing, customer care and sales. And Antonius Fromme is doing a new unit of -- focusing on a new unit, which we call customer lifetime development. So it's not only about the product lifetime, which was in the past, kind of the key KPI, we are trying to form an entire basket of products for the customer and market it even more professional to increase share of wallet. We will also most likely, in the next presentation in 3 months' time, also show how we do that on a campaign level. Retail is back up and running. And we will -- we foresee a stable development within the lines of our existing guidance. Whereas, on the right-hand side, TV and Media, we see good development on our radio business and expect more ad sales in the second half of the year. And waipu.tv will launch its first own branded waipu.tv stick. This stick will have -- will replace the existing remote control in the household. But adapting to what the Germans are used to, you press 1 and you get the first national program. You press a waiputhek button, you press a waipu button, you press a Netflix button and so on and so forth. And I think that's going to be very interesting to see how it is taken up by the end consumers. To be honest, the limiting factor, not doing the launch right now, is the chipset availability. So we will launch it by the end of September. Having said all that and going back to the initial statement of transformation delivering also on financial KPIs on Page 11. This is how we do adjust our guidance and our prognosis for the full year. Postpaid development, I think you've seen where we are. We think it's going to be a moderate growth. We see on the freenet TV, a slowdown of the losses, but it's going to -- it remains -- it will remain a moderate decrease from the 900,000 of the past year. That is -- still remains the case. But showing the EBITDA development, you can see that this is not impacting free cash flow or EBITDA at all. And on waipu, we see solid growth, I would even say significant growth, seeing now 645,000 already by the half of the year. So my personal ambition was for it to be going to 700,000 by the end of the year. If we look at the EBITDA, the existing guidance was EUR 415 million to EUR 435 million. We adjusted in two dimensions. One is that we think it's going to be more likely for -- it's going to be definitely beyond EUR 430 million. Our personal feeling now is it's going to be on the upper end of the new guidance of EUR 430 million to EUR 445 million. I personally think it's going to be closer to EUR 440 million. So we have slightly decreased the span, but we have definitely raised it. And we raised it -- it's going to be beyond the former EUR 435 million. And the same goes for the free cash flow, still a bit more vague than the EBITDA, depending on a couple of things that might impact it, but overall also an increase and outcome beyond the level that the existing upper end of the guidance was published. So having said that, I'm very happy once again about the development. I think it pays back the passion, the readiness to transformation, the positive mood across the entire company. And I'm very happy that it now also becomes visible in the numbers. And saying the numbers, I hand over to Ingo for more detail.

Yes. Good morning, everybody. I start with the big picture on Page 12. I'm very happy to show such a positive development. And if we look into the group revenues, it is a stabilization in comparison of Q2 '21 to Q2 '20. We saw that the losses, what we had to show in the first quarter, are no longer in the books here because retail is back as Christoph already said. On a gross profit level, you see that operations are very stable, and I'm happy about it. If you put into consideration that last year, we still had the gross profit effect from freenet digital. If you put this out, the gross profit in the first quarter -- in the second quarter '20 was EUR 208.3 million. And now we have a gross profit of EUR 210.3 million. So gross profit up, revenue stable and definitely group EBITDA up. We see a quarterly EBITDA here of EUR 113.5 million. If you compare it with the adjusted figure of Q2 '20, it is an increase of nearly 4%. Having said that, I move to Page 13, where you can see the development in the mobile business. And yes, definitely, the headline, what you see here is totally correct. It's rock solid. And the generation of free cash flow is still very high out of this business. Revenues are slightly up on a service revenue level again here in the postpaid business. On a gross profit level, we are slightly above the figure from Q2 '20. And so it is a positive development compared to the first quarter, where it was slightly down, so gross profit up. And on the EBITDA side, a similar picture, where you see that the EBITDA is up. And the level on which we are is very stable because there was the EUR 92 million level in the first quarter and it is the same in the second quarter. So moving to some separate KPIs of the mobile segment here on Page 14. Christoph already talked you through the customer base development. And I think it is very important to put into consideration the growth here in FUNK and FLEX tariffs, the app tariffs, what we have, because these tariffs are also very profitable. And the profitability definitely is comparable to what we see in the normal postpaid business. On the ARPU side, yes, we see that there is a stabilization after the losses, especially from roaming, in the last quarter, we see a normalization here. The pity for us here is that the gain in roaming revenues does not give us any upside in EBITDA. But I think we're definitely happy that we see the stabilization in the ARPU here. And this is also something what we guide for the whole year. Digital lifestyle revenues strongly and significantly up here on a quarterly level, more than 10%, 14.4% up in a quarterly comparison. So we are very happy that we have here a lot of options, 24-month contracts also here. And this helps -- and retail has backed the sales in addition. So moving to the TV and Media segment, Page 15. Revenue up to EUR 69 million here in the quarter, which is comparably to what we saw in the first quarter. Gross profit on a level again of EUR 44 million. So if you compare it with the last 4 quarters here, you see that this is something like a new normal. I think this is something what I forecasted already in the last analyst call here. And on the EBITDA level, we see a significant increase here because also some of the cost measures and cost savings were working very properly here. Then looking into the divisions of the media segment on Page 16. What we see here in freenet TV, all-in, an EBITDA increase of EUR 3.5 million. So it doubled the development from the first quarter. In Media Broadcast B2B business, we see not such a strong development. This has to do with the new initiatives, what Christoph was talking about. So we started these initiatives, and we had some, let me say, starting costs here to do the businesses and to close the contract. So we will see the positive effect in the following quarters then. On waipu.tv, we see a continuously move in the right direction. So now our EBITDA is EUR 5.4 million higher than last year. Still the development, each single month generates a positive EBITDA here. And for the whole year, we expect something like an EBITDA of around EUR 5 million, what we already forecasted. Then moving to one excursus, how we called it here, this is the impairment of the fiber optics network, this right-of-use, what we capitalize when we bought EXARING in 2015. And I think what we did in 2015 in the balancing was totally incorrect. Because that time, the situation was different and the value of the network was much higher than it is today with the environment, which has totally changed. So what is possible today? Today, for us, it is possible to buy the network capacity out there in the market and the operating costs all-in for us are lower than for the network, what we have before here. And I think we already discussed it in the last quarter. So it should not be any surprise to you, but we are -- I think it is the consequence here what we did in the balance sheet and what was necessary is to depreciate here the right-of-use to 0. And this has a negative effect of EUR 30 million. But no cash effect, definitely not, and I think, in the long run, it should be more positive than negative for our results. On Page 18, you see the free cash flow, which is significantly up here. It is corrected by the Sunrise payments what we received last year, we received a dividend of EUR 46 million in the second quarter of 2020. So this is falling away. But on the other side, we did not have that many interest payments, which was EUR 5.6 million in the first half of 2020. So all-in, change in working capital, which is minus EUR 20.4 million, better than last year, tax payments on the level of last year, CapEx slightly higher, some investments in digital radio here. So we are not stopping any investments here. We do our business even on the back of the pandemic, no changes here. On the lease side, something comparable to what we saw last year. Interest payments here, slightly up. This is -- the reason is that we -- in the figure of 2020, we do not show the interest payments for Sunrise. So if we would correct it, then the interest payment last year would have been EUR 23 million. And then you definitely see, and this is what you would expect, a reduction of interest payments. So all-in, a very strong development of the free cash flow. Therefore, what we did for the rest of the year, and what we did with our guidance is that we increased the guidance here. And what we do forecast here on a quarterly basis today, it's something like EUR 50 million to EUR 60 million. I think there were some disruptions last year, where the third quarter was very high. This was extraordinary because we got some payments, which were not expected earlier. So for this year, I do expect a stable development for the last 2 quarters, and I do expect something between EUR 50 million and EUR 60 million a quarter. Moving to the balance sheet figures on Page 19. Yes, it -- since we sold the Sunrise stake, it looks very strong here. An equity ratio, even after the dividend payment of 41.3%, a leverage of 1.9. And if you only look into the bank leverage, how we call it here, it is 1.0. At the end, I would like to come back to the share buyback program. So Christoph already mentioned that EUR 60 million here are still open in the buyback program. So if you see the pace how we do the buyback, I think, yes, we are totally on track. We do still expect to spend the whole EUR 135 million, what we announced. And I think if we do it in the pace how we do it today, this would work during the year. So yes, it is on track and the share buyback is ongoing. And I'm optimistic that we reach the whole volume. Okay, that's from my side. Thanks a lot. And now I think we are open for your questions.

[Operator Instructions] And the first question is from Josh Mills, Exane.

Just two for me. The first is the standard one on mobile competitive environment. I know there's been some more sub-brand activities in Vodafone this quarter. But if you could comment on how you see the pricing environment out there and perhaps potentially as well over the last couple of months into the third quarter, that would be great. And then the second one was just a bit of a follow-up on the EXARING write-down. So I guess, my question is why has the value of this asset dropped at a time when the fiber-to-the-home assets generally are attracting more interest from third parties? I understand that it may be simpler for you to use a wholesale deal going forward to provide services for waipu. But are there any other usages you could look to for the EXARING business? And then lastly, could you just confirm your economic ownership of that fiber asset and what it would be used for going forward?

Okay. Thanks. Well, I think, overall, there is not much activity on the competitive landscape side. I think you've seen the numbers in Deutsche Telekom. I mean, they just remain to be the premium offering. They don't fool around with pricing, which remains their key weapon. Vodafone has launched their SIMon [ Fox ], which is a SIM-only tariff plan. So far, we understand it is that they felt that they don't do Congstar, they don't do klarmobil like we do. So they felt that they need a second brand on that level. A personal comment, I think it is a super smart idea that they have implemented the fact that the price for the end consumer is a result of where this individual was before as a network. I think that's a very smart idea. But it is rather difficult for the individuals because, from our own research and from the day-to-day life in the shops, we know that people are not fully aware of where they come from. So it's difficult for them to understand whether they're going to pay EUR 8.99, EUR 9.99, EUR 11.99 or EUR 14.99. And for those of you that have not seen the tariff plan, it's like -- well, it's always the same data ration included. But it depends on whether you are -- have been a Telefónica customer, mobilcom-debitel customer, Telekom customer, Vodafone customer. The thing is rather difficult. And we don't see them a lot in the market. We've seen a release, but we don't see big campaigns. And we can -- we do not realize any pressure at any end. Conversions is still the main bet from Vodafone as well as Telekom. We all know that Srini Gopalan from Deutsche Telekom has done that successfully in many other countries. But it also shows that it's more difficult in Germany. In fact, they did a couple of campaigns. They also were visible with MagentaTV, for example, on new release TV sets. And all the numbers that we have heard of behind the curtains were also okay, but -- maximum, okay. I would call them rather disappointing. So I think that is on that end. And the other thing that we've seen is that, first time at least to my knowledge, Ralph Dommermuth from United Internet said that he believes that he's going to be ready with first offering on his own network at the turn of 2022 to 2023, which sounds to me that it will be very local at the day of his obligations. But it will only change the market if at all or has an impact on the market, if at all, in 2023. So in that sense, I guess, working on -- under stable conditions and being focused on good customer management is the name of the game for any of the players. To your second question on the fiber network, we have to go back 5 years ago, when we acquired EXARING and we have thought about how this entire venture would work out. One of the founders or founding partners was the owner of that network. And he had his shares for the usage of the network for 10 years free of charge, except for maintenance and electricity, et cetera, et cetera. So that was the deal. And back then, fiber network across the country was rather limited. And for the quality of service in IP, which we thought is necessary in order to compete with satellite and cable, we felt it's necessary to have that network. So that fiber network capacities -- technology has kind of like made a single fiber line being 70 times more competitive than back 6 years ago. And I'm sure you are familiar with the technology that has enabled this. So this means that we have -- we owned a fiber duct and two micro ducts for ourselves, and we couldn't use the capacity at all. And it was not foreseeable that we would use it the next couple of years, even though we are growing, but still technology acceleration is much faster. So then we've certainly looked into other deployments of it. But the original contract did not allow us dark fiber and other applications, but it would be TV-limited in case. But we had the option to buy the entire network with these 14,000 kilometers of 2 micro ducts and then get the freedom to do anything on our own. So we had the choice of doing either the one or the other. But the investment and even a co-investment with third party in the fiber turned out not to be quite feasible for our type of asset-light and more short-term type of business model. We are not an infrastructure player at all. So we have ruled out that option. And then it became clear that we need to revalidate the value of the fiber network with its maintenance and running costs versus the capacity that you can lease in the market right now. So I think, overall, that has just changed. And the activity -- the connectivity, fiber-to-the-home, it's nothing to do -- has nothing to do with that network. So it was just a -- it's a process of the last, to be honest, 18 months with all validations, including third-party validations of buying -- options to buy, to resell it, to combine forces. And it turned out that this one is the absolute best solution because we remain to be focused on what we do best, B2C business, and not going into infrastructure.

That was really clear. And maybe to clarify then the last question was the economic stake that you have in, firstly, EXARING, and then secondly, waipu.tv at the moment, can you just confirm what that is after all of this discussion?

Yes, that is now -- is it 71%?

No, it's 65%.

65%.

For both assets effectively?

Yes, it's the same. I mean, waipu was just a product of EXARING.

The next question is from Polo Tang, UBS.

My first question is really just about the guidance. Because the midpoint of your EBITDA guidance only suggests around about plus 1.5% EBITDA growth in the second half after you've done plus 3.9% in the first half. So can you clarify if there are any headwinds to watch out for in the coming quarters? Or are you simply being conservative? And the second question is really just on EXARING. So can you clarify what's happening in terms of the CapEx and OpEx impact in terms of moving over to lease lines from 2022? And can you clarify which network you're going to be using going forward? So is it Deutsche Telekom? Is it Versatel? Or is it somebody else? And my third question is really just a bigger-picture question in terms of mobile. I mean, how important is ownership of shops and how important is your partnership agreement with MediaMarktSaturn? So I'm just asking because if you look at your mobile business, over Q1 and Q2 of this year, it was very resilient and you still saw a very solid mobile net adds. Therefore, can you migrate more of your business online and be less reliant on stores and shops? Alternatively, are stores still an important element in terms of supporting the online business? If you can maybe just talk about that, that would be great.

Yes. Thanks for these questions. I'm going to take the one on retail and maybe on the fiber technology, and Ingo will explain the financials again. On the retail, and I summarize retail in our own shops and even MediaMarktSaturn. I think what we've learned and established and taken benefit of is that on retail, you have a different -- this is a different target group. That's people that want to talk to somebody. They don't want to do research online. They don't want to compare. They don't want to try to figure out which price comparison is a correct one. These are people that are -- feel more comfortable going into a shop, having an individual in front of them, talking to this individual and trying to better understand what the right choice for the individual is. This is also our USP, our proposition. If you enter our shop, you have all the networks and not a single one. And if you want to -- would you go to a single-branded shop, obviously, they will sell you the network that is part of their name. So that is our proposition. This proposition remains a profitable one. The major difference is two things. One is the prices are less comparable than online. The second is that, based on this noncomparable prices, the margins tend to be better and online is a highly competitive field. If we change a single price or a single offer, we do an extra, we reduce the initial fees, we change -- we give something on top. We allow a late payment, all these kind of promotions that are run online, they kind of are copy/pasted and -- by any of our competitors within a second. It's basically a competitive game of robots fighting each other. And again, all the claims from who else want to talk about it, online is not cheaper than retail if you do retail properly. We don't do flagship stores in the high street. We don't do 400 square meters marketing shops in pedestrian zones. We do a very tight and brutal, strict measurement on each and every of the locations on a monthly basis, whether we cover the cost, whether we include -- including recruiting, training, et cetera, et cetera, and we only run shops, who, at the end of the day, are profitable. The major difference from a customer experience and also from what I call customer lifetime value is that when we have somebody in a shop, they typically take 1 or 2 options on top of the tariff plan. They take a -- if they take a mobile handset, they most likely take scratch protector, they take a cover, et cetera, et cetera. So the margin on those kind of accessory products is way higher than at the end of the day, the -- or we can do much more than we could do online. So having said that, it's a clear combination and a clear strategy of omnichannel. We will remain to be working on retail. We are super convinced that this is a -- as we know it from the numbers that is a profitable channel. You have to do it as consequent as analytically as you do it in online and then it absolutely makes sense. And this also is a matter of fact for our big partner, Media-Saturn. There, it's the same. If you do it strict and consequent and with daily measurement and with incentives for the shop reps, et cetera, et cetera, it's a profitable business, and we will not then let go. A quick one on the so-called new network of EXARING. That is not a network. We go on to Deutsche Telekom or we go on to Versatel, it's -- we need long-distance connections between the big cities -- between our data centers and the big cities to the peering points. And it may, in one or the other case, be Deutsche Telekom. It may be completely unknown ones. In part, it's even our old partner, who still is offering it to us but now on a different contractual level. So it's not that we rely on any individual. But we lease long distance and we do the peering at the local level, still running everything from our data management and from our own data centers. So in that sense, the only difference is, in the past, we had one single partner and now we have about a dozen. That's a difference. But it's still our own network. It's not that we are on the line, where thousands of others and certainly bottlenecks would appear at any end. It's still our own network, but it's kind of a puzzle, a jigsaw puzzle of individual pieces instead of one single ownership at a single partner.

Yes. And therefore, the -- because you asked about the CapEx, there will be no change in the CapEx to what we saw before from this. And then you asked about the guidance and how conservative it could be for the second half of the year. What headwinds we may -- do expect here for the second half. I think on an operational side, from what I see today, I do not expect any headwinds. And therefore, yes, the guidance or the midpoint of the guidance may be -- could look a little bit conservative. On the other hand, and we discussed it in different quarters now, I think on the cost side, we still would like here to be on the safe side. Because what we saw in the first half of the year were some money, what we get from the government for this short-term work. This was not there in the second half of '20, but it will also not be hopefully in the second half of '21. And what is still open is the development of bad debt. The situation is still very, very positive, very good. The payment behavior of the customers is much better than before. But comparable to the second half of 2020, that time, the behavior already was that good. So I do not expect any big headwinds and -- but I'm still a little bit cautious on the cost side, what will happen in the second half, so -- but on the operational side, and I think this is the important message here, I do not see any headwinds, which are part of the guidance here.

The next question is from Ulrich Rathe, Jefferies.

I'd like to, first of all, clarify a comment in the results report, where you talked about help from lower bad debt allowances, allowances for receivables. Is there any release of the provisions you have taken for this -- in this? Or is it simply that the ongoing sort of natural allowances that you book are simply lower without releases of what you've booked in the past? Second question is the freenet TV subscriber losses. You talked about the stabilization within a couple of months at the time of the Q1 results. If I look at consensus estimates for this, I mean, this sort of -- these negative numbers of sort of a decline of this customer base until all eternity in market expectations now. Could you clarify what you think about the longer term there? Do you think that, that base will actually stabilize without a negative number in front of the net adds over the foreseeable future? And if yes, how do you intend to sort of drive that? Is it simply petering out the price increase? Or do you think you will continue to raise prices and will accept the customer loss for the benefits that you described in the [ right price ] last time? And then my last question, if I may, is I'm not entirely sort of clear on what you expect for the postpaid net adds in the second half. You sort of reaffirmed the guidance. But does it mean that you expect these net adds to accelerate versus the first half? Or do you think what you've seen now is more or less representative of what you think this might happen in the second half? I think in the report, you're talking about additional campaigns, gearing up for additional campaigns, which would suggest that you expect an acceleration. But I just wanted to confirm that.

Thank you, Ulrich. Maybe I could start with your first question. None of the provisions, what we built in the fourth quarter '20, are released. So we still have these provisions of EUR 5.6 million in the books. Maybe to the postpaid net adds, I think what we guide is a moderate growth. I think what we are seeing at the moment, in our eyes, is a moderate growth. I think maybe there are some positive surprises in the first quarter and the Christmas business what we do not see at the moment. But what I would expect from today's point of view is something like a comparable development in the upcoming quarters here. And then your question about our expectation, I think we have a guidance out for '21 now. We just started the budget process for 2022. But I do not expect any decreases in EBITDA from today's point of view, but this is a little bit early and it is not as strong as a guidance and you may understand it, Ulrich. So I think we -- you will get a new guidance, but I do not see any signs from today's point of view why it should be lower than what we see this year.

That's clear. Can I just follow up the question on the freenet TV customer intake. There seems to be a bit of a disconnect in terms of what you're saying that you expect the drift -- the customer drift to sort of stabilize compared to market expectations since it is negative for -- until 2025. So I was wondering, would you sort of say that...

Well, I mean, we look at this on the quarter -- on a daily basis, obviously, but we report it on quarterly. We see now a slowdown in churn, or let's call it, attrition, I would prefer the word attrition. And also in summer now, it looks that it slows down. Still, we do believe that, mid-term, this is going to go down because people are moving, people identify new technology, IPTV, et cetera, et cetera. We ask all the people that are leaving the service, what is the driving force and so on and so forth. It's technology only. They're very satisfied with the product, but then they realize that they could do it on IP. The majority actually goes to IP. So that is a result of better connectivity and bigger speed allowances and offerings. So in that sense, I would still believe that over the next 3, 4 years, it will, step-by-step, go down. But it will remain on a very high EBITDA contribution level on the one hand side. And sooner or later, we will start to kind of cannibalize ourselves and move these customers into our own IP services. And I think, in my operational role, I think this more as a total customer development and not so much as a -- at the end of the day, is it 20,000 here on IP and 20,000 less on premium TV? But are we making more money in total with the customer base? So I think it might look a bit contradicting, but mid-term, certainly, this will step-by-step go down. I think when we talked to you and your colleagues, we still said that in -- by the end of this year, it could well be another minus 40,000 or so going more to [ 800,000 ], but still EBITDA would be 50% higher than last year. And certainly, we also know from the last price increase that the impact on churn was very minor. So once again, not predicting it, but there is a toolbox being -- named price increase, which we could deploy anywhere in 2022 again and then save the gross margin, the EBITDA contribution for even longer.

The next question is from Martin Hammerschmidt, Citi.

I have two on the TV segment, if I may. First, on the B2B business, you have won the tender to broadcast the Bundesliga and the 2. Bundesliga. Could you give us a sense of what that contract contributes to your EBITDA sort of per year? Because I remember -- and I remember because you expect EUR 10 million step-up by 2023 from the DAB+ investments, so is that still valid? I think that was versus 2020. And then the second question is on waipu. I mean, the customer growth in the last 2 quarters has been below 40,000. And some of that might well be due to less marketing and hence the EBITDA growth. But could you help us understand how you want to steer that business in the future? And at what point would we expect customer growth to accelerate? Or is that sort of 30,000, 40,000 per quarter a good proxy run rate? And then maybe related to that, I think in the -- a couple of quarters ago, you said that roughly 1 million customers would equal a double-digit EBITDA. So do you expect that by 2023, or since you would spend less on marketing, maybe even by 2022?

Okay. Thank you. Let's start with the waipu.tv thing. While we're doing about 30,000 to 40,000 this quarter, as I said in my statement, I think we could be more aggressive, but then we would waste money. We are very, very detailed. We have a very daily detailed monitoring. Majority of customers come online in social media. So we're trying not to overspend and manage, in that sense, product lifecycle contribution. So I think we could -- could we go up to 50,000 a quarter right now? Yes, we could, but it would damage the profitability. And this is a balance. So this is how we manage it today. Second part of your question was where is the tipping point where this could kind of go hockey stick or much faster? And I want to be -- we've known -- all of us, we've known each other for many years, and we are not beating around the bush. That's the question that I have and that is the question that I ask my team every day. So what is the tipping point, where suddenly, we should open the gateway and blow the money in and grab the customers? And I cannot disclose -- we have numbers from MagentaTV promotions. We have comparable numbers what we did with Samsung and what they did. The fact is that they're struggling with the same thing, high stickiness of individuals to their old remaining technology. They are addicted to the old remote control. So I think the entire -- the good thing is that IPTV and the access through fiber or VDSL, or whatever you name it, is becoming more and more present in the market, more and more present with individuals. And they do understand that this is a real alternative. But nobody is really taking heavy benefits and the uptake is still minor. The fact that this [indiscernible] will drop and all these things contribute to it, I think the -- how can I say, the name of the game is to be ready when it's opening and then to boost. And I think that is definitely what we do. So if we suddenly feel that uptake is going up, people do understand that the adoption rate is increasing, then we will certainly be there and ready to spend more money. So as I said, I think we're going to go close or slightly beyond the 700,000 this year, that would be my target. We will not save money in order to show higher profitability. But on the run rate level with 700,000, we would already be EUR 2-digit million on a pure run rate with the EBITDA. The second one on the Deutsche Bundesliga. We cannot disclose anything around that because it's a single point of -- it's a single contract partner. So if we would disclose anything about gross margin contribution, we basically disclose contractual details and would even enable our contract -- opposite party to nail this -- to nail us and to change the numbers with the next round of negotiations. So I don't want to do that.

The next question is from Yemi Falana, Goldman Sachs.