* Q1 EBITDA down 7 pct to 337 mln eur vs poll avg 323 mln
* Keeps 2013 outlook for sales of around 4.1 bln eur
* Sees competition remaining fierce in major mobile markets
(Rewrites first paragraph, adds details on competitors, quotes)
By Georgina Prodhan
VIENNA, May 7 Telekom Austria said it
expected price competition to intensify in its major markets,
rather than diminish as had been hoped by Austrian carriers
after a consolidation of the market.
Until last year, Austria had four mobile carriers fighting
over a population of just 8.4 million. That was cut to three
with Hutchison Whampoa's takeover of Orange Austria
in January, but price pressure has not relented.
Posting a 7 percent drop in first-quarter core earnings,
Austria's biggest telecoms operator stuck to its forecast for
full-year sales to fall to about 4.1 billion euros ($5.4
billion) from 4.3 billion last year.
"On the group's major operating markets like Austria,
Bulgaria and Croatia, price pressure in the mobile business will
be further exacerbated by intensive competition," it said in a
statement on Tuesday.
Quarterly earnings before interest, tax, depreciation and
amortisation (EBITDA) fell to 337 million euros, beating the
average estimate of 323 million in a Reuters poll, as the
company cut costs to combat stagnant revenues.
Carriers all over Europe have been struggling with
increasingly budget-conscious customers, and although Austria is
relatively prosperous, it has been at the forefront of
consumer-friendly regulation that has cut into operators'
The group said average revenue per user fell in Austria,
Croatia and Bulgaria, though sales overall remained stable
mainly thanks to a substantial improvement in Belarus and the
acquisition of budget operator Yesss in Austria.
Jan Trionow, chief executive of Hutchison's Austrian mobile
business, told Reuters earlier: "There can be no talk yet of the
market calming down."
Economic weakness in Europe is hurting telecoms operators
across the continent.
Spain's Telefonica is expected to report a 10
percent quarterly sales drop in its domestic market due to
continuing high unemployment, and Deutsche Telekom's
sales and profits are also seen falling.
Telekom Austria, in which Mexican tycoon Carlos Slim's
America Movil became a major shareholder last
year, said its operating expenses rose by 18 million euros as it
spent more on subsidising expensive handsets in an effort to
retain high-spending customers.
The company's average revenue per mobile user fell 16
percent in Austria, only partly due to dilution through Telekom
Austria's acquisition of budget mobile operator Yesss, and also
fell in its two other main markets, Croatia and Bulgaria.
Quarterly sales were roughly flat at 1.05 billion euros,
beating the Reuters poll average of 1.03 billion, while net
profit of 56 million euros also beat the poll average of 28
Telekom Austria stock trades at around 20 times 12-month
forward earnings per share, a premium to Deutsche Telekom
on around 13 times and France Telecom on 8
times, according to Thomson Reuters StarMine, which weights
estimates by analysts' previous forecasting accuracy.
($1 = 0.7642 euros)
(Editing by Michael Shields and David Holmes)