Telekom Austria AG (TA1.F) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the results for the Fourth Quarter of 2024 Conference Call. I'm [ Iruna ], the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Susanne Aglas-Reindl. Please go ahead.

Good morning, everybody, and thank you, operator. Thanks for joining our call on the Q4 and full year results 2024. I'm here with our management. I'm here with our CEO, Alejandro Plater; our Deputy CEO, Thomas Arnoldner; and our CFO, Sonja Wallner. And as usual, they will lead you through the presentation now, and we are happy to take your questions afterwards in the Q&A session. Thank you.

Thank you very much, and good morning to everyone. Let us drive you through some of our Q4 and full year results. As you can see in the slide, we had a strong end of the year. showing 4% service revenue growth, driven primarily by our international CEE operations. Also, you have seen strong total revenues. As we were anticipating in different calls, we were working in several big ICT businesses. Some of them we managed to close in '24, some we hope that we will close in '25. EBITDA also shows a strong performance with a growth of 7.1% as well as free cash flow coming up to EUR 575 million for the full year, plus 62% versus 2023 despite of increase of leases. As you know, we had spin-off our towers in 2023, which reflects an increase in speed of leases in the year, of course. But nevertheless, we managed to grow free cash flow by 62%. And on the market, we see a very strong equipment sales in Bulgaria, Belarus and Austria. That's something that we were working on, especially in Austria, we were very active in the Christmas campaigns with more hardware offers. We adjusted our subsidies in several parts of the portfolio since we saw an opportunity to push hardware sales and also to have a better platform on the subscriber base, as you will see later. And also Bulgaria, primarily driven by large ICT deals that were reported in the quarter. And we managed also to revert the penalty that we got in Belarus in Q2, if I remember correctly. So we had this negative one-off in Q2 due to this administrative penalty in Belarus that we managed to negotiate out and revert the provision in Q4. And this is basically, the penalty was removed, and we have committed to do certain investments as a way of compensating this. We have been working in '24 to make the last of our markets fully convergent. So now we are ready in Serbia to launch fixed services in a combination of wholesale of MTS network, us building our own fiber network. So we expect very much to see that, especially after today's news that looks like SBB has finally being sold to PPS. So we will have 2 strong convergent competitors in Serbia. So it's even more important that we also build a strong convergent proposition in the market. And yes, still very high rated in ESG. As you know, it's a very important and focus areas that we follow. So still very highly rated. It's very important for us, not only what we do, but how we do it. So this is critical for us. For the outlook, we see a guidance of total revenues between 2% to 3%, lower inflation, of course, we see all over the place. So I think that is going to be reflected in a lower indexation and therefore, a slightly lower revenue growth that we were anticipating before. And also, we are adjusting CapEx to EUR 850 million, basically following the same logic, lower inflation has lower indexation, which is slightly lower revenue guidance. But also, we see the same impact on CapEx with less indexation in CapEx cost. We see it clearly in CPEs that 2 years ago, CPE prices went crazy, especially with all the issues that probably you remember with lack of chipsets and it was crazy. Now we see exactly the opposite, very competitive CPE markets, prices going down dramatically. And CPE investment is a very significant part of our CapEx. So to give you an example, but also in other CapEx positions, we see that the price pressure is coming down, and we are managing to negotiate much better conditions than we were planning to due to lower inflation. And our dividend proposal from the Management Board to the Board and then the Board probably to AGM is to increase dividends from EUR 0.36 to EUR 0.40 as we have been doing the last couple audits. Moving to customer development. We are pretty satisfied with the development. I'm very satisfied with what the Austrian team is doing, especially at the end of the year, seeing opportunities to tactically invest in subsidies in certain segments where we think that we can be very competitive. So I'm very proud of what the Austrian team has managed to do, especially the last quarter was very, very well executed, especially there is a little bit of pressure on the low-value segment. So differentiating ourselves in the high value. It's very important for us. And we have seen very good customer development, especially in residential postpaid, which was a focus area that the team had in Q4. Overall, you saw our mobile subscriber base going up 7.4%. And also, you can see our broadband base also increasing with a special focus in what we call advanced broadband, which is higher speeds. That's what has driven basically RPL and revenues, especially in Austria. When you look at the results in Austria, this still is a strategy that even though we have been doing this for many, many years, we still managed to monetize pretty well upselling the base. Not only now on speeds, we are managing to upsell the base, as you will see a little bit later with other products. We were focusing in speed first, then we started to focus on OTT content, and now we are focusing more and more in other things like cybersecurity for the residential segment or insurance, as you will see [ this morning ]. Moving to the next one. You see the full year numbers here. Total service revenues going up 3.5% on an annual base. Equipment revenue is flat year-over-year. And despite this big push that we did in Q4, as you can see, with close to 24% increase in equipment revenues, driven by both phones, but also ICT. As you know, ICT is becoming more and more important business and we are focusing more and more on that because we see a great potential moving forward on ICT business. So total revenues were 7.8% in the quarter and 3.1% in the reported year. Of course, in pro forma is a little bit higher, but it's negative of the difference. The components you see all segments are growing. Mobile core is growing, Cubes or FMAs is growing. Broadband and TV is growing. We have only 2 areas that are not growing. One is fixed voice, driven primarily by Austria, where we have most of the revenues as well, and interconnection that is mostly regulated tariffs coming from the EU. That was a big cut, if I remember correctly, close to 50% this year versus 2023. And when you look on the segments -- the geographical segments, you see still a very strong growth in our international OCE business with a growth of 7% in constant currency and flattish in Austria. But nevertheless, I think that due to the situation of the economy in Austria, I think the team did a very good job in 2024, where we focused more in having a growing and stable customer base, especially in the mobile segment. With that, I will deep dive slightly more in Austria. As I said before, you see 10,000 net adds in mobile, very important for us. We see a little bit decline in B2B and TV growth basically some companies struggling, but a very good performance in residential postpaid. Also, the strategy that we are pursuing on fixed is working pretty well. We lose a little bit of RGUs, but we fully compensate those RGUs on revenues by upselling the base, as I said before, in speed, but not only more and more focusing cyber solutions for the residential segment as well as some financial services. If we go to the next one and focus on CEE. You see the International segment, strong growth in all markets. You see Bulgaria with revenues up 20%, driven again by ICT. EBITDA also very strong. You see Croatia, very good results. We were focusing a lot in '24 in stabilizing the fixed platform where we did a lot of fiber investments, and we were not very happy with the uptake. But at the end of the year, we saw a much better performance there. Belarus, of course, we look at constant currency numbers, very solid. Q4 is a bit affected by the reversal of the penalty. That's why you see 67%. You need to actually remove the reversal of the penalty to see the true operational performance, which is very solid, nevertheless. Serbia, also a very good performance in the market, as you see. And the challenging market is Slovenia. You see revenues declined in Q4 and EBITDA, you see at 24%, but that is affected by a one-off of 2023. North Macedonia, our smallest market, but nevertheless, very solid performance in the quarter and throughout the year. We are the leaders in mobile and doing a very good job in fixed as well. Having said this, I will hand over to Sonja, who will drive us a little bit more details on the P&L.

Thank you, Alejandro. Hello also from my side to our conference call. I'll focus on the Q4. Alejandro already mentioned, Q4 was a very strong quarter in regards of revenue delivery. Coming to the OpEx, you see a strong increase, but also mentioned already by Alejandro, we had one-offs and the equipment sales that we did or the ICT sales that we did are reported in the OpEx. And this OpEx increased by EUR 63 million. Coming now to the EBITDA, as mentioned also that we had a couple of one-offs in '23 and '24, you see a strong EBITDA, excluding one-off performance of nearly 10%, 9.6% increase in the last quarter. Also, the EBIT reported a strong growth despite the depreciation and amortization that we -- the increase that we were facing and all these increases shows a 5% increase in the EBIT and also net results in the Q4 was very strong with an increase of 27.5%. Coming for the full year, there I would like to mention especially below the EBITDA effect. You'll see the development of the EBIT that's heavily driven by increase due to the tower spin-off, the depreciation and amortization of the tower spin-off. And the same is true also for the net results where we added the [ net ] pro forma version. That means that we show the net result of '23 as if the tower spun-off had already happened before 2023. And here, we show also a very strong net result of 12.5% increase year-over-year for the entire year. Now, let's switch to the free cash flow performance. I will focus here, especially on the full year, where you see a development or a free cash flow of EUR 575 million for the full year. That's a strong increase in regards to 2023. And the most important drivers were on one hand side, a challenging working capital development, but heavily driven by the good revenue performance of the last quarter. As mentioned, good and big customer projects that we were able to close within December and therefore [ had ] receivables and one development that comes out of 2023, whereas in Austria, the subsidy for the broadband rollout was accounted for, and therefore, the negative impact because of that. Positive impacts that we were able to manage is that despite to the lease payments due to this tower spin-off in Q3 2023, we had a better result that we were able to transform into the free cash flow at lower CapEx, especially for frequencies and we're able to pay lower interest and income tax in comparison to 2023. And then said that, I'm handing over for the focus topics to Thomas.

Thank you, Sonja and Alejandro. As you can see, this time, we have prepared a little bit of focus, especially in Austria, as you're probably used to in the Q4, a deeper dive on our infrastructure plans for Austria, but especially also this time, we want to highlight what we do in order to free up more resources for investments, but especially also for the markets in order to do what is most important for us, which is staying relevant for our customers. If we come on the next slide first to the infrastructure side and especially here on the fiber market, let me remind you about how we see the market. I don't think this is extremely new to you. But still, I think it's important to have in mind because we see quite a differentiated picture how the market is evolving, and this has to be managed very carefully. Three main challenges. Number one, the market in the Fiber segment is extremely fragmented. Today, we see more than 300 players. Some of them, to be honest, we believe being under quite some pressure, but a very fragmented market. Secondly, rollout costs driven by inflation, but also by -- from our point of view, an excessive subsidy scheme have kept -- increased tremendously. And overall, we now see rollout costs are way too high. Take rates are too low, especially in the market. We're doing better than the market, but overall in the market, it's unsatisfying, which obviously also drives the payback period too high, which is very differentiated, however, throughout the different regions or areas or rollout scenarios in the markets where we try to adapt with our rollout strategy. And thirdly, and I think this has been in the market for almost forever. The market is still very much fixed wireless access driven. We have very strong mobile offerings. The mobile WiFi routers remain very popular. They offer very high quality combined with the ease of use. As a result our strategy, in this fragmented market, we are reinforcing partnering. We're doing it very consciously. We are not parting with everyone, but only with selective networks, typically those which are state-owned where we have attractive conditions. We really prioritize our rollouts dynamically according to those areas I mentioned before where we see lower rollout costs or higher take rates. And of course, and this is what I think really differentiates us, ourselves from the competition. We can use also our strong mobile network to offer fixed wireless access and to provide the fixed-like mobile substitution for customers in areas where our fixed network is not offering the required [ speed ] where we believe that the mobile deployment is more cost efficient. So if you move to the next slide, providing you with a little bit more numbers and flavors. At the year-end of '24, we had around about 850,000 FTTP, so FTT to the building and to the home passed, which is an increase of more than 100,000 last year, which is, by the way, still by far the biggest deployment which you see in Austria. And we are running at a speed which we believe fits the market conditions I just mentioned. And on the mobile side, as we have more tools in our toolbox than the fiber only players. We now cover around about 86% of the population with 5G and in '24 was the year where we started shifting the investment from covering more coverage or territory to increasing the capacity in the network. We address our customers in a technology-agnostic way, always providing the best option available. And so both our fixed and our mobile offerings are contributing to our broadband service revenue growth, which resulted in a 3.5% CAGR in our total broadband revenues, which we call the Internet at home revenues, which you see here in the box. And as Sonja mentioned, also our ARPU has increased in fixed. It's now at EUR 38 which is a 5% growth year-over-year, which is mainly driven by the shift in the subscriber figures from basic to advanced speeds, but also especially by speed upsell and by the progress in cross- and upselling of additional services, which Alejandro mentioned in the beginning, where, for example, we are offering security services or insurance services to our residential customers as well. At the same time, looking at the cost side, we want to give you a bit more insight on our restructuring efforts, which we do in order to take down the cost in the organization and to free up capital for the market, both for the infrastructure investments, but also for the investments in our customers, as you have seen previously also what happened in the [ BB ] previous year's financial results, which I described earlier. As you know, we are running a restructuring program since many, many years, where we mainly address civil servants and mainly with social plans where we grant a specific amount of the salary being paid until the retirement age, which allowed us to reduce our numbers of FTEs by 21% since 2019, so in the last 5 years and to reduce the share of civil servants in Austria now down to 25%. Additionally, we are also addressing a lot the external workforce, which is not on our payroll but generating a cost. Within that reduction, what you don't see here, but what I really want to mention is that we have a significant shift also in structure of the workforce, especially adapting to the new skills, which are required to run our operations. And overall, and most importantly, when we look at the total workforce cost, you see comparison between 2019, '23 and '24, you can see that basically, we managed to keep our total workforce costs flat in an environment, especially in the last 2 years where we had very high inflation. And as you know, especially in Austria, salary increases are highly linked to the inflation. But with the restructuring programs, we managed to keep that more or less flat. On the provisioning side, we are provisioning these restructurings. The current restructuring provision amounts to EUR 340 million at the moment, addressing around about 1,700 employees. And as more and more of these people are retiring. And at the same time, we are reducing the number of addressed new civil servants. We expect some effects starting 2026 with a lower social plan funding in the free cash flow with lower restructuring costs reflected in the P&L and also the restructuring provision I have shown you is expected to decrease over time. And why are we doing this? Again, we want to free resources for the market, and we want to focus what is most important for us, which is our customers. We have talked about the concept of CDC's competence delivery centers before, where the idea basically is that those functions which are not customer-facing, where we can create synergies across the groups, across the 7 markets we're operating in. We try to harmonize. We tried to build one delivery center. You see this on the bottom of the slide. This encompasses functions like the network, service delivery, operations, the back office, but where it matters most for our customers, which is our biggest asset, which is our local sales force and our local products and services. We keep that local and we develop that along our customer journeys, allowing us at the same time to build on those local assets on the one hand side and at the same time on the delivery side to gain scale, to be able to create economies of scale and savings also when working with our partners because we reduce the number of tools or solutions or vendors, which we need. And of course, it allows us also to drive automation in the delivery engine. So in summary, again, on the infrastructure side, following up a market technology strategy last year with, I think, a very pragmatic approach in the fiber deployment in Austria as well as building on the strong 5G network, which we have and using cross- and upselling beyond the core to keep our service revenues growing. And at the same time, continuing with the restructuring which is a long-term transformation, but which provides midterm free cash flow upside, which will also allow us to invest more in the market and into our customers. With that, finally, moving to the outlook, where, as Alejandro said on the first slide already for '25 on the revenue side, we expect 2% to 3% revenue growth. On the CapEx side, excluding spectrum, EUR 850 million. On both sides, this is basically a reflection of the lower inflation, which we see now in our markets. On the revenue side, of course, less opportunity to do inflation increases. We see -- we expect the majority of the revenue growth of the 2% to 3% to come from higher service revenues, both from Austria, but especially as in the past from the international markets. Again, the key growth drivers include upselling in the mobile consumer business, the high demand for connectivity and ICT solutions in the business segment and the growth in the fixed line business, especially in the international market. In contrast, we expect again, declining voice revenues and lower interconnection revenues driven by regulation. And we anticipate growth primarily in the mobile consumer business and in the solutions and connectivity business. On the CapEx side, as I described earlier, the investments in fiber are still at a high level, but a bit lower than in 2024. This is also reflecting lower inflation. And as I said on the previous slide, is reflecting also the market development. Dividend, as Alejandro said, very consistent with the policy, which we have been following in the past year. Our proposal to the Board and to the AGM for the dividend to be for the financial year '24 is going to be EUR 0.40 per share. With that, closing the presentation, and we are very open to take your questions.

[Operator Instructions] The first question from the phone comes from Rathe Ulrich (sic) [ Ulrich Rathe ] with Bernstein.

I have 3 questions, if I may, please. The first one is on Austrian fiber rollout. There is a comment in the release, which you didn't discuss in your prepared remarks. I believe that the budget for fiber rollout in 2025 is below that of 2024. Could you discuss why you see less opportunity at this time for that? And the second question is, I think the quarter before last, you talked about Bulgaria probably not going to continue in double-digit growth. You're delivering spectacular growth in the fourth quarter. Is the fourth quarter an outlier? Or has the situation changed a little bit there and sort of the growth outlook is maybe a bit stronger than you seem to indicate earlier? And my last question is on the cash repatriation in Belarus, whether you have any new developments that you can tell us about?

Thank you, for your questions. On the first one, we are not planning to decrease investments of fiber in Austria '24 to '25, slightly changes, of course, nothing significant. What changes is where do we do the rollout? We have to finish certain subsidized areas that we have certain deadlines that we are committed to. And some of those areas are quite expensive to roll out, so it has to use a lot of CapEx to roll out per households, even though it's subsidized by the government, so we don't cover the whole cost. So that you will see probably in '25, a little bit less number of households being built, but not a change in the total invest, only marginal changes. So that I can tell you because we need to finish these projects that are subsidized and have specific deadlines that we need to deliver. That I can tell you. On Bulgaria, I can tell you that, of course, we are very impressed with the work that the team is doing there. You have to also put a grain of salt on the results when you look at hardware revenues because we see a huge increase of hardware revenues, close to 25%, 26% increase in the fourth quarter. And that's something that you will start seeing for good and for bad because when we do all these big ICT deals, some of them, they have a lot of hardware. And then we will book them, we have a spike of hardware revenues and then we have the challenge how to do it again quarter-over-quarter over-quarter because we don't get those huge deals every quarter. So we still think that the growth in Bulgaria will not be double digit on service revenues, but you will have these very strong quarters driven by ICT. That's an area that we have been focusing a lot the last couple of years. Also keep in mind that inflation is coming down. So our ability to index even now continues, it continues a much lower percentage. However, I don't know if you recall that 2 years ago, in one of these calls, we mentioned that we don't like -- we operate better with low inflation where we can upsell the base. We operate better than we index the base and then there is no room for upselling. So we are much happier to see a lower inflation because we have a machinery ready to upsell the base that we were using very well until inflation came. And when inflation is taking so much share of wallet of customers, there is not much room to call again and try to upsell them. That's what I can tell you. Do you want to comment, Sonja, on the cash repatriation from Belarus? Go ahead.

We are working at the moment on establishing a vehicle to get on a middle way that the dividend is starting with the end of the year to repurchase the money. On an operative level, at the moment, as the cash is blocked in the country. We tried to shift the money towards our customers to invest in the installment sales and to use the money with a better yield than having blocked in the banks.

Without this commitment or promise or anything like that, we expect to start paying slowly dividend back maybe at the end of 2025 slowly, not to upset anybody, but that's the working hypothesis that we have today.

That's very helpful. Can I just clarify one thing really quick? I'm aware, of course, of these big hardware revenues in Bulgaria, which have been one of the revenue drivers also in the past. Just to clarify, this is not the sort of low margin or even loss-making kind of device revenues on mobile devices. These are hardware revenues where you actually make a margin, maybe not quite as high as the telecoms business, but this is accretive to EBITDA, right?

Correct. It's generating margin, not as much as, of course, other products. But it's important for us because we upsell those customers afterwards with other services as well. But we don't do in ICT loss-making hardware deals.

[Operator Instructions] The next question from the phone comes from Nagy Nora (sic) [ Nora Nagy ] with Erste Bank.

Two from my side, please. Firstly, can you please confirm your investment plan for 2024, '26 of EUR 2.8 billion, given that in '24 and '25, likely only EUR 1.7 billion is planned to be spent? And secondly, could you give us, please, an outlook on how long shall we expect the subsidies in Austria?

On the investment plan, well, you've seen that we lowered slightly our CapEx plans for 2025. I explained the reasons why and our thinking, lower indexation and lower inflation, we see lower pressure on CapEx. So we are managing to get discounts on -- with partners and vendors that actually we were not planning to have. CPEs are a clear example. I mean the erosion on the prices of 5G Cubes is significant for us. To give you a concrete example, how much we were paying for this 2 years ago and what is -- how much we're going to pay now is a significant reduction. We will give new 3 years guidance next year. So we will have an updated guidance for the next coming 3 years. As an indication, you can see we are lowering CapEx this year. So maybe that's where we are going in terms of thinking. But we will update the 3-year guidance -- rolling guidance next year. I can comment on the subsidies. So you have to differentiate between those subsidies, which have already been awarded in course under the [ TBA ] 2030, the current broadband subsidy scheme and what we expect to be awarded under -- on the new course. So the current course are being implemented by those who receive the subsidies. This will take quite a few years longer over the next years. We do expect based on the challenges, I think some of the faces that a significant of those subsidies or those areas where others have committed to build out will not be built out by our competitors. So probably some of those subsidies will even be returned by market players. Now with regards to new scheme, we don't know because we don't have a new government in Austria yet. As you know, the budget, the fiscal budget in Austria is under quite some pressure. We have been arguing publicly a lot that we do not believe that now is the right time to issue new subsidies because it's a real disruption into the market. It's driving up cost, and we should rather focus on completing those areas who have received subsidies already. And as I said earlier also in the focus point, we have other tools available, for example, mobile services, but also satellite services to address those potential customers or households in very rural areas with a very good broadband quality. We don't know if a new government will issue new broadband subsidies. It's a very heated debate. Given the fiscal pressure, we do believe that at least over the next 2 years, probably the funds will not be available, but this is speculative. Of course, we don't know what the new government will decide.

The next question from the phone comes from Baheti Ankur (sic) [ Ankur Baheti ] with JPMorgan.

So you just talked about regarding your CapEx plan for 2025 being lower versus what it was earlier. And you also provided some comments regarding where could we see CapEx going ahead in 2026 and '27. So I just wanted to know more color on your dividend growth plan given your payout ratio is relatively lower. So any comments on that would be helpful.

CapEx? Yes. All right. So as I said before, yes, we lowered CapEx slightly in 2025, driven by primarily better deals that we are getting from vendors. I don't want to put names, but the major providers, let's say, of ours, we are negotiating better conditions. I mean all these supply chain constraints are over. So I think that purchase power is back on us, I would say. So that's good to see. So -- and that will reflect in the CapEx investments. As I mentioned, CPEs is a very important investment area for us and part of our CapEx, and we see substantial reductions on CPEs. On top of that, something that I can mention, we see more and more traction of TV solutions without CPEs, just with an app in the smartphone, and that's very efficient for us because we don't need to give a box. And of course, in some markets, you can charge for the box. In some markets, it's more difficult to charge for the box. We are keeping the Austrian fiber investments more or less stable, small changes, which is another big part of our CapEx so that we are committed. We are confident, as Thomas explained, that we have a very good strategy of the pace of rollout of fiber, complementing in a technology agnostic approach using the 5G cubes and not investing too fast when the demand is not clearly there. So our guidance for the next 3 years, we will give next year on CapEx and on revenues and on EBITDA. We want to have a little bit of discipline on when do we give you a 3-year guidance. So I will not mention what we're going to do in '26, '27. But I mean, if you see that low inflation continues, if you see that there are no supply chain issues, you can basically think what we will do with CapEx. But we want to give a proper guidance of the next capital markets that we will plan to do probably next year. But for sure, we will give you next year guidance on the rolling next 3 years. And on the dividend, look, I think we have been very consistent in what we do, and we have been living up to exactly what we committed where we said we would increase the dividend along with the operational and the financial performance of the company. You see yet another decrease in dividend. Yes, you could argue it's a bit conservative, but we prefer to be conservative because I think the past years have also proven us right. We prefer to keep also optionality. We see lots of transactions ongoing, and we take it from there. So for the fiscal year '24, we did what we promised in the past. Going forward, again, our dividend policy is upright, and we will see how the market develops.

The next question from the phone comes from [ Patadis Jon ] with Deutsche Bank.

I wanted to ask questions about your revenue headwinds. And specifically, I'm trying to understand or get to grips with how much longer these 2 headwinds will be significant to your revenue prospects. And in order to do that, I would be grateful if you could tell me what the total fixed revenue -- fixed voice revenue number was in 2024. And the same thing for interconnection, what they were a year earlier? And because we don't really have a good view of the sort of regulatory outlook across the group's footprint, maybe you can talk about what the prospects are for interconnection revenue in 2025, given any sort of planned additional regulatory cuts.

Well, I will start, but feel free to complement. So it's -- on interconnection, there are 3 factors, some that we can predict, some that we cannot predict. So on one hand, in our interconnection business, you have the regulated business, and then I will comment on the nonregulated business. Regulated business, it's influenced a lot by [ majorly ] EU pricing. There was a big cut in prices from the top of my head. Yes. So it's a constant cut in prices, and I think that this will continue. I think the last one was 60%, if I remember from the top of my head, but we can come back to you on that one. But that's not the only effect. So there are other effects that we are seeing that are becoming more and more important. One is a quite rapid shift to VoLTE. So we see more and more traffic moving into VoLTE. And VoLTE, there is no [ secret fixed ] interconnection, of course, because it's an IP code. So the more all players in Europe and implement VoLTE in the networks, the more operators in the world, they all connect -- implement VoLTE for roaming customers. All those things, we see also a decline in interconnection minutes due to a change of the way that the voice calls are done basically. On top of that, you see a lot of OTT applications being used like WhatsApp and all those, which is another way of doing voice over IP at the end, which is also reducing the amount of minutes. Now we have the price. Now we're talking about the minutes. So then we have another part of the business that is the nonregulated that we have a unit in the group that has like EUR 80 million to EUR 100 million in revenues that is doing international business, we call it, which is from trading minutes to, I don't know, Germany to Turkey with very low margin to also do other types of solutions. Like, for example, they do interconnection of solution connectivity services for customers like Microsoft from Frankfurt to Bulgaria, for example, right? So that's another part of the business that we do. On the concrete numbers, probably Susanne can go back to you how big they are or you want [ to share ].

Yes. We had fixed voice revenues in total EUR 200 million in 2024 and EUR 213 million in 2023. Therefore, it's approximately EUR 14 million reduction over one year. And interconnections reduction was high. It was EUR 40 million reduction from EUR 255 million to EUR 215 million.

And this will continue. You can expect always very difficult to predict, but we expect the same rate of decrease basically and it's affecting primarily Austria because most of the -- almost all the fixed voice business is in Austria, a little bit in the other markets, but marginal.

Sorry, just to confirm, it would be right to assume that fixed voice revenue is above average margin and interconnection revenue is below average margin. Is that correct?

Interconnection is basically low margin to make it more clear. And fixed voice is a high-margin business. But also, you know Austria has a high cost. So our ability to remove costs from Austria, as you have seen in the last couple of years and as also Thomas presented in what we are doing with CPEs. We have still a lot of opportunities.

We have a follow-up question from Rathe Ulrich (sic) [ Ulrich Rathe ] with Bernstein.

I don't want to beat the dead horse, but I was just a bit surprised by your answer on that you're not decreasing investments in Austria. So in the outlook statement, I just looked it up in -- off the report, sort of the one item that's been called out in the new CapEx guidance is that the investments in Austrian fiber will remain at a high level, although they are expected to be lower. So is the answer that you gave essentially -- should we take that as meaning that it's only a very small reduction really and the sentence here in the outlook statement shouldn't be overinterpreted or how does this all fit together? I'm a bit confused.

Well, what we were saying that we are declining or reducing a very small -- almost no decline in fiber. We didn't say in Austria, in total CapEx in Austria. So total CapEx in Austria in '25, we are reducing, but not in fiber in other areas. CPEs, we are doing less investment in certain IT parts. So just to be very clear, CapEx in Austria is declining slightly versus '24, but we are not touching fiber.

That was the last question.

Okay. If there are no further questions, thank you all for the presentation, and thanks for joining our Q4 conference call. Have a good day.

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