T-Mobile Czech Seeks Income Boost From Smart Phones, Chief Says

T-Mobile International AG’s Czech unit, the country’s largest mobile operator by clients, seeks to nearly triple the number of customers using smart phones in order to generate 20 percent of its mobile revenue from data in three to five years, its chief executive officer said.

“It’s very important for us that this indicator continues to rise and reaches this level,” Chief Executive Officer Milan Vasina said in an interview in T-Mobile’s headquarters in Prague. “To achieve that we need to have about 50 percent of our clients on smart phones.”

T-Mobile Czech generated 24 percent of its annual mobile revenue of 27.3 billion koruna ($1.7 billion) last year from both data and text-messaging services the company said, without providing a breakdown of the revenue. About 15 percent of its 5.4 million customers are currently using smart phones that are capable of browsing the Internet, sending photos, downloading music and using social network applications.

Deutsche Telekom AG (DTE) Chief Executive Officer Rene Obermann, whose company operates T-Mobile, needs to revive sales in eastern Europe to meet a goal for boosting profit margins and return Europe to growth, excluding Germany, by 2013.

Revenue Declines

T-Mobile Czech, which competes with Telefonica Czech Republic AS and Vodafone Group Plc’s local unit, is targeting growth in both mobile-data and fixed data traffic to offset a decline in revenue from voice and text messaging after competition and regulatory changes cut prices.

T-Mobile’s first-quarter revenue fell 9.4 percent to 6.54 billion koruna. Ebitda or earnings before tax, depreciation and amortization, fell 5 percent to 3.3 billion koruna in the period, the company said on May 5.

Vasina, 41, succeeded Roland Mahler, who led the company since 2000 and is currently Deutsche Telekom’s interim head for Europe, excluding Germany. Under Mahler T-Mobile Czech became the most profitable of all T-Mobile’s international units.

T-Mobile, which invests about 1 billion koruna annually into its third-generation network that is capable of sending large amounts of data from smart phones, plans to cover 70 percent of the population with 3G services by the end of 2012. It may roll out LTE or long-term evolution technology, in three to five years, according to Vasina.

“It’s important to stabilize the total revenue and 2013 is a viable target,” Vasina said. He did not exclude possible acquisitions that would help to boost growth, without giving more details.

To contact the reporter on this story: Lenka Ponikelska in Prague at lponikelska1@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez in Prague at jagomez@bloomberg.net

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