T-Mobile Czech Republic Plans €600M Investment in Fiber

T-Mobile Czech Republic plans to invest up to €600 million (US$736 million) during the next five years in the rollout of higher-speed fiber-based networks, according to a recent report on the Czech-language E15.cz website.

Milan Vasina, the CEO of T-Mobile Czech Republic a.s. , told E15.cz that his aim was "to build optical networks that go directly to households," which suggests the investment will go into the deployment of fiber-to-the-home systems.

"We want to be the number one in convergent services" he is reported to have said.

The former state-owned monopoly, now controlled by Germany's Deutsche Telekom, will spend between €400 million ($491 million) and €600 million ($736 million) on the fiber rollout in the next five years, according to the report, including between €20 million ($25 million) and €30 million ($37 million) already invested during 2017.

It spent about €89 million ($109 million) in overall capital expenditure in the first nine months of 2017, earnings reports show.

The funding provided over a five-year period will connect up to 1 million households -- between a fifth and a quarter of total homes in the Czech Republic -- according to the E15.cz report.

T-Mobile estimates that it costs between €400 ($491) and €600 ($736) to extend fiber to a single household.

Precise data about T-Mobile's existing FTTH footprint in the Czech Republic is not readily available. The operator has "thousands of fiber optic connections" in the country, according to E15.cz.

Vasina complained that optical network coverage is much lower than in leading western European countries such as Spain and Portugal, where 80% of households can now receive fiber-based services, he said.

The rollout of fiber in the Czech Republic would boost connection speeds to about 1 Gbit/s, he is quoted as saying.

A potential obstacle to the plan is local regulation: Obtaining authorization to build fiber can be a drawn-out process, E15.cz reports.

T-Mobile served about 133,000 broadband connections at the end of September, just 3,000 more than a year earlier, according to Deutsche Telekom's latest earnings report.

However, customers appear to be spending more on fixed-line services in euro terms. T-Mobile generated about €61 million ($75 million) in fixed-line revenues in the quarter ending in September, up from just €52 million ($64 million) a year earlier.

Its larger mobile business also registered growth in the quarter, making €195 million ($239 million) in sales, 4.3% more than in the same period of 2016.

Despite the revenue growth, earnings before interest, tax, depreciation and amortization fell 1.9%, to €101 million ($124 million).

T-Mobile faces strong broadband competition in the Czech Republic from European cable giant Liberty Global Inc. (Nasdaq: LBTY), which recently claimed that its sales rose by 5% across central and eastern Europe in the quarter ending in September.

— Iain Morris, News Editor, Light Reading