110
2013
Annual Report
2
Revenue, profits and cash flow
In 2013 market revenue has once again dropped with respect to the prior year. In the case of Euskaltel’s
activities, the year-on-year variation of revenues, by quarter, is as follows: -4.3% in the first quarter,-6.3% in
the second quarter and -9.2% in the third quarter. However, Euskaltel has generated operating income of
Euros 324 million, reflecting a variation of -2.8%. Another aspect that differentiates Euskaltel from other
private operators is that it has maintained its high penetration in the business sector, with revenue from this
sector representing 31.3% of total operating income.
Net profits for the year amount to Euros 50,092 thousand, up 4.1 % on the previous year. Euskaltel also ended
2013 with a positive free cash flow of Euros 86.1 million, all of it business-derived.
Other relevant issues
Euskaltel has faced the challenges of 2013 with a number of specific measures. 2013 saw the launch of its
combined product, OSOA, which in the space of 11 months was contracted by 50,000 homes (out of the 220,000
homes with Euskaltel's fibre optic internet lines), a product which promotes the convergence and flexible
bundling of Euskaltel’s products (broadband, television, mobile, fixed-line) providing customers with the best
prices for internet connections. Euskaltel has also increased broadband capacity for its customers, optimising
technological resources and demonstrating that speed is no obstacle to the fibre optic network already rolled-
out by Euskaltel. Customers have also welcomed the possibility of buying mobile phones on an instalment
basis, which significantly increased sales in this respect and has complemented the sales of the rest of the
mobile phone products, including both SIMPLE tariffs (SIM only) and bundled broadband services.
To give its offers the efficiency sought by customers, Euskaltel is also transforming its marketing and customer
communication processes by promoting on-line channels, which facilitate communication with the customer
and enhance new forms of communication offered by new technologies.
As it searches for the best long-term technological solutions for its customers, Euskaltel has reached a new
mobile and data network sharing agreement whereby Orange will become Euskaltel’s wholesale access services
provider for the next five years, beginning 1 January 2014.
Conclusions
Euskaltel ranks seventh overall in terms of fixed-line telecommunications revenue (the result of being fifth in
fixed-line telephony, sixth in Internet services and sixth in pay-per-view television subscribers) and ninth in
mobile telecommunications revenue, which combined puts it in eighth place in terms of total revenue per
operator. Business trends in the Basque market are comparable with overall trends seen in Spain with respect
to the reduction in revenue from both fixed-line and mobile phone services, including broadband, which until
now had been the sector’s driver.
