Very warm good morning, ladies and gentlemen. On behalf of the Executive Board of 1&1 AG, I would like to welcome you to our Q1 conference call for the first quarter. During this call, our CFO, Markus Huhn, will present to you the results for the first quarter of 2024, followed by the guidance for the year and the status of our 1&1 mobile network. Following the presentation, as usual, we then take your questions. Thank you, and I now would like to hand over now to Markus.
Thanks, Oliver. Good morning, this is Markus Huhn speaking, CFO of 1&1 AG. Warm welcome to our call this morning. Yeah, as Oliver has mentioned, I would like to give you an update on our performance in the first quarter as well as on the financial results as of end of March. Let us step into the presentation on slide number 4, the customer base. We've increased our customer base by 40,000 new customer contracts in the first quarter, 40,000 mobile contracts, and, in the broadband base, we have a solid situation with 4.01 million contracts as of end of March. The net adds, in the first quarter in 2024 have been influenced by the start of the migration of our customers into our own mobile network as well as on more aggressive sales offers in the first quarter in the discount market.
The focus in the first quarter was to test several migration scenarios and to set up the necessary processes to make sure that the customer will not have any negative customer experience over the migration process. So the current situation is that we have a solid situation over all processes and departments that are responsible for the migration, and that what we learned out of the tests in the first quarter. Regarding the competition landscape, we still have a focus on a solid contract value and a solid pricing structure, and we didn't try to meet each aggressive offer in the market.
At the end, a weaker Q1 in terms of net adds compared with the last quarters, but yeah, as I've already mentioned, we kept broadband lines on a solid level of 4.01 million customer contracts. Regarding the situation in Q2, our expectation is that we will generate in a range of 80,000-100,000 new customer contracts, versus 70,000 net adds in the Visible Alpha consensus. So it means that we are in line or very close with our expectation to the consensus. Yeah, as already mentioned, the migration processes are running in a good quality, and the competition situation in the market is less aggressive. So, we are quite sure that there's a realistic range of the mentioned 80,000-1,000 new contracts for the second quarter. Now we come to slide number 5, revenue.
Revenue in total grew with 0.3%, up to EUR 1.024 billion. Service revenue grew with 4.2%. Other revenue, mainly smartphones and routers, decreased by -12.8%. This decrease is caused by a very strong first quarter last year in 2023. So in Q1 2023, we have sent out a value of, revenue value of approximately EUR 20 million for smartphones, coming up from a backlog in the fourth quarter in 2022. So without this impact, other revenues would be slightly below the first quarter in 2023. And, this is driven by a lower demand out of our customer base. On slide 6, there is the EBITDA by segment. In the Access segment, we have realized EUR 224.7 million EBITDA in the first quarter, which is an increase of 11.6% compared with the year before.
The minus EUR 42.4 million EBITDA in the segment 1&1 mobile network, the year before it was minus 90 minus EUR 19.2 million, is reflecting our activities for the rollout and operation of our mobile network. On slide seven, you can see what we have spent for CapEx in the first quarter 2024: EUR 10.1 million in total, EUR 2.6 million spendings in segment Access, and EUR 2.5 million driven by the rollout of our mobile network. The spendings for mobile network seem slow in the first few. Reason is a delay in billing us for equipment and services from Rakuten in the first quarter. But yeah, the biggest part of CapEx will be generated in the third and fourth quarter, so in the second half year of 2024. Now let us step into the financials on slide number nine, the P&L.
So I have already commented on the revenue. Cost of sales grew from EUR 712.5 million in 2023 to EUR 725.2 million. Depreciation, including EUR 65.4 million spending in the rollout, operation, and depreciation of our mobile network compared with the EUR 25.9 million in the previous year. Therefore, gross profit dropped from EUR 308.5 million to EUR 299.2 million. Without these spending for the mobile network, gross profit would increase from EUR 334.4 million to EUR 363.6 million, which is a +8.7%. The costs for distribution increased slightly from EUR 126.2 million to EUR 129.6 million. The administration costs rose from EUR 28.2 million in 2023 to EUR 29.3 million in 2024. Other operating income is with +EUR 8.1 million above the level in 2023 with EUR 6.1 million.
The impairments on receivables and contract assets grew up from EUR 26.8 million to EUR 30.5 million. In total, in the first quarter, a moderate cost increase driven by higher personal expenses, marketing, and impairments on receivables and contract assets. The profit from operating activities in 2024 with EUR 117.9 million is below the result in 2023 with EUR 133.4 million, which is also driven by higher spending for the mobile network. The financial result with EUR 0.9 million is below the result in 2023 with EUR 1.4 million. Then we come to a profit before taxes of EUR 118.8 million, EUR 36.1 million tax expenses, and a consolidated result of EUR 82.7 million for the first quarter in 2024. The balance sheet in total rose from EUR 7,740,000,000 as of end of 2023 to EUR 7,837.9 million as of end of the first quarter.
The increase of EUR 97.6 million in the assets is mainly driven by the following positions, investments in the free cash flow with United Internet, a plus of EUR 65 million, increase of receivables EUR 16 million, a decrease of inventory, inventory minus EUR 42 million, fixed assets plus EUR 63 million, and other positions with minus EUR 4 million. Liabilities increased by EUR 14 million, a decrease in the short-term liabilities with minus EUR 32 million, and an increase of, EUR 46 million in the long-term liabilities, which is a result of the increasing number of antenna sites that we have leased. On next slide, cash flow, you see, the net inflow from operating activities with EUR 88.5 million in the first quarter after EUR 100 million in the first quarter last year.
Cash flow from investment activities are below 2023, EUR 69.4 million in 2024 versus EUR 95.3 million in 2023 because of lower investments in our mobile network. Cash flow from financing activities are with -EUR 17.9 million, higher than -EUR 4.7 million in Q1 2023, which is driven by payments to our partner for the rollout of white spots. We finished the first quarter 2024 with a free cash flow of EUR 78.5 million versus EUR 59.8 million in the year before. On next slide number 12, we have the bridge from the EBITDA to free cash flow.
On the left-hand side, you see the EBITDA for the first quarter with EUR 182.3 million, then a negative impact of EUR 20.8 million because of increase of receivables and other assets, the decrease of inventories with a positive impact of EUR 41.7 million, a decrease in the liabilities from goods and services, with a negative impact of minus EUR 30.8 million, a negative impact of minus EUR 1.6 million out of other working capital positions. Then we have taxes with minus EUR 82.2 million and CapEx with minus EUR 10.1 million. So in result, we come to the already mentioned free cash flow of EUR 78.5 million for the first quarter. Now we come to the outlook for 2024.
We confirm our outlook for 2024 with service revenue of approximately +4%, which means approximately EUR 3,370 million, an EBITDA in total of approximately +10%, which leads to 720 million euros in the segment AXIS +12%, which leads to approximately EUR 880 million EBITDA, and the segment 1&1 mobile network with approximately -EUR 160 million EBITDA, and a cash CapEx with EUR 380 million for the year 2024. So many, many thanks for your attention so far. And now I hand over to the operator for the Q&A session.
Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To whisper your question, please press star one and one again. Please stand by while we compile the Q&A roster. We will now take the first question.
Coming from the line of Andrew Lee from Goldman Sachs, please go ahead.
Good morning, everyone. I just had two questions. One on just the competitive environment you're facing and secondly just on your visibility on costs. Just on the competitive environment, seasonally low mobile net adds this quarter, but just wondered if you'd seen any real impact from Telefónica Deutschland's slightly more aggressive promotions, etc., on family plans and then or anything else in the market that's changed meaningfully versus the fourth quarter. And then just on the costs, you obviously the startup losses on the OPEX side were slightly lumpy this quarter, a bit more front-end loaded than we had expected. And the CapEx is obviously very lumpy in the quarter.
So just given you're going into a period of, you know, heightened investment, how confident are you in your visibility in, in delivering to, you know, fairly exacting, startup losses and CapEx for the full year? Thank you.
Yeah. Regarding to your first question, to the market situation, so, we have seen, aggressive offers from, from Telefónica Deutschland in the premium segment, but, the, yeah, more aggressive offers we have seen from, for example, Freenet. So, and, the offers were earlier short-term offers, sales, actions. What we have not seen is that, any of our competitors is reducing their prices in the portfolio.
So, our view so far is that we have a stable situation in the pricing structure of the portfolios and, short-term, sales offers that are more aggressive than in the past, regarding the cost and CapEx situation of our mobile network. So, what is our expectation for the OPEX side? We will have an increasing OPEX situation because of the further rollout of our network in the next quarters. Beside that, of course, we are generating savings because of the migration of our customers. So that means that the EBITDA situation in the next quarters will rather be stable. So in the first quarter, we have the -EUR 42 million. The expectation is that the impact in the second quarter is a bit higher than the -EUR 42 million.
Then in the second half, we will have the savings, so that the negative impact of EBITDA in the second half will be a bit lower than, for example, in the second quarter, but the expectation is that the quarters are very close together. There will not be a big impact in the second quarter. Regarding CapEx, I've already mentioned during the presentation that the biggest part of the CapEx will be spent in the third quarter as well as in the fourth quarter, because of finishing the two further core data centers that will be finished within the next 2 months. The CapEx for that will be billed to us, maybe end of Q2, maybe at the beginning of Q3.
So the expectation is that we will see, as I mentioned, the bigger part of the CapEx in the second half year.
Thank you. Can I just have a quick follow-up just on your commentary around the startup losses? Obviously, you got minus EUR 42 million in the first quarter, and then you're saying it'll be a bit higher in the second quarter. Then obviously, there's some offset from the savings in the second half. But you said that the expectation is you'll see similar startup losses every quarter. Does that mean you could end up a bit higher than the EUR 150 million startup losses for the year? And don't want to get too kind of, you know, bog down in the basis points, but yeah, is that how we should think about things?
We still see the guided EUR 160 million as a negative impact, EBITDA for the mobile segment still as a realistic number for this year. Thank you.
Thank you. We will now take the next question. From the line of Polo Tang from UBS, please go ahead.
Hi. Thanks for taking my questions. I have three. The first question is just a bigger picture question. Would you still continue to build a mobile network if the regulator decided to extend the 800-megahertz spectrum to existing players and there was no option of 1&1 getting access to low-band spectrum in the next five years? So that's the first question. Second one is just really on your mobile subscribers. You did 40,000 mobile net adds in Q1, but can you clarify how much of an impact you saw from migrating subscribers over to the NRA in Q1?
Are you still comfortable with your guidance of a 200,000 impact on subscribers for the full year, from the NRA migration? My third question is just about Vodafone. Is there any update on the finalization of the Vodafone NRA?
Thanks. The first question is rather easy. It is yes. So if we will not get low-band spectrum, we will continue with our mobile network rollout. The second question regarding the impact of migration and the net adds in the first quarter, please have understanding that we will not give detailed information to the number of NRA migrations and the cancellations during the process. As I mentioned in my presentation, we tested a lot of scenarios in the first quarter.
And we have a rather good feeling about the running processes, and we are quite comfortable, and we are definitely in line with that what we mentioned in the meeting in March when we told the market that we expect around 200-300 Net Adds in this year because of the migration impact. And that's definitely something that we still see as a realistic scenario. Regarding your third question to the National Roaming Agreement, so we are in a good conversation with Vodafone. We are very close to finalizing the contract, and we expect it within the next weeks. So we are very comfortable, and as Mr.
Dommermuth has mentioned, the contract that we have signed last year, in our view on that and also the view from Vodafone is that it's a binding agreement that we have. So at the end of the day, what we are doing now is to put all details in the National Roaming Agreement, and to finalize all the technical agreements that are necessary to process this contract. And both parties are working with the teams so that we can start earliest in July, latest on the 1st of October with our cooperation. Can I just come back to the answer to the first question because my understanding is you said that you would still build even if you had no low-band spectrum.
That if you don't have low-band spectrum, it's quite difficult in terms of indoor coverage and rural coverage. So if you don't have low-band spectrum, is there not a risk that you wouldn't be able to migrate much traffic onto your own network? So you would have a lot of fixed costs that you wouldn't necessarily be able to get much saving if you didn't have low-band spectrum. Y-yes, that would be the case.
Then we would have to use a National Roaming to have a good indoor coverage, which means that we would have a lower traffic coverage, and it would have an impact on the financials of the case. It is not a scenario for us to stop then with the rollout of our network because we have the obligations out of the auction in 2019, and we believe in the case whether we would get a low-band spectrum not in 2026, maybe later. We still believe in the case, and we would continue with the rollout if we would not get low-band spectrum. To make it clear, our expectation is not that we will not get any access to low-band spectrum. We believe that there will be a way that we will have access to low-band spectrum.
Okay. Thanks. Thank you.
We will now take the next question. From the line of Joshua Mills from BNP Paribas Exane, please go ahead.
Hi, guys. Thanks for the question. So there's two from my side. The first one is just a more general question about communication of your network build plans to the market because it's now been five years since you bought the spectrum, and during that time, management has, you know, not given midterm guidance on the financials. I think in the past, you've, there's been a few reasons for that. So firstly, it was not having the tower contracts in place. Then there was a lack of visibility about the MDVO. And now the two outstanding issues seem to be the terms of the German spectrum auction and, I suppose, signing and finalizing the contract with Vodafone.
So my question is, assuming that we get an update on the German spectrum auction in the next couple of months and assuming that that is going to be a spectrum extension rather than auction, will you then be in a position to give the capital markets some indication of the longer-term costs and returns profile of this network build to convince the market this is a worthwhile enterprise rather than sticking with the pre-existing MDVO model? The second question is a bit shorter, but I think in your report, you note there's been, yeah, the antenna numbers ramped up to just over 1,300 sites. In the Q4 report, you also gave some detail on how those antenna were connected to base stations, and you were guiding for about 600 to be connected, as of the end of this quarter.
Could you just give us an update on how many base stations you have and how many of those have been connected with fiber as well? Thanks.
Yeah. As we already have mentioned in the past, we said that we can come up with a mid-term financial plan after we have all building blocks finished. So one block that's still open is the question how and when do we get access to low-band spectrum. That's something where we expect a decision within the next months.
And after that, that's also something that we have communicated in the past is that we would organize the CMD. We would say it will be somewhere, earliest in the Q4, where we can come up with a mid-term plan and with the details to the case. Regarding to your question to the antenna sites, our target for end of this year is still the 3,000 sites that we would like to have. And to your question regarding the antennas that are already or where already active equipment is installed and where we have fiber connection, there we mentioned in the first quarter the 600, and that's a number that we have reached. So we had 530 at the end of the first quarter, and we are very close to the number that we've mentioned in March. Okay.
Thanks. So you've got 530 versus the target of 600 for the quarter. I mean, is there any other building blocks that you're still waiting for this year, or is it right and fair for us to assume that, you know, within the next 12 months, we'll now have some type of capital markets day, which will give us more disclosure and targets for the network rollouts? No, the last item was the question to the Low-band spectrum.
Great. Thank you.
Thank you. We will now take the next question. From the line of Titus Krahn from Bank of America, please go ahead.
Good morning, all. Thank you very much for the presentation or for the opportunity to ask questions. Just two quick ones from my side, please.
The first one is just a bit of a clarification or follow-up on the migration that you're kind of currently doing. Could you maybe remind us when you actually started the migration to your own network and how much in Q1 was basically testing rather than the full migration at full speed? And did you already reach the full speed on a daily basis of migration to your own network that you were envisaging? And the second question would be just on the fixed broadband after we talked so much about mobile. Could you give us an update on competition there, what you're seeing on fixed broadband, how you're upselling to fiber, and how this is going on? Thank you very much.
So regarding your first question, to the number of MNP migrations, please have understanding that we do not want to, or that we don't like to, mention the exact numbers of migration. So as I mentioned earlier in the first quarter, it was a low number of migrations that we did because the focus was testing. And we started with, let's say, a significant number on a daily basis, end of March. And now we are very close to that what in optimum can work. So the optimum would be 50,000, in theory, 50,000 migrations per day. But it depends on how many migrations or MNPs are done by our competitors, because they are also using this process. And today we are in a range, I would say, between 20,000-40,000 migrations per day.
Our target is to increase it within the next months, but our approach is for the moment to keep it on this level. As I also mentioned earlier, we are satisfied with the quality that we see in the processes. We migrate these customers on four days per week. Just to give a bit more color on the process, on the situation, as I mentioned earlier, we are quite sure with the 80,000-100,000 Net Adds for the second quarter. Currently, end of April, we had approximately a bit more than 1 million customers in our mobile network. Hopefully, that helps you to get an idea or a better understanding on how the processes are working and how the progress of the migration is.
To your question in the fixed broadband business, I would say, in the yeah, the pricing in the market is also in a solid situation. We didn't see any significant changes in the market, in the pricing or in the offers. We are satisfied with the progress that we are doing in yeah, in selling our fiber tariffs. It is a very regional business, and therefore it takes more effort than, for example, in the earlier VDSL business. We are satisfied with the progress, and also with the situation in the first quarter that we kept the broadband lines on a solid base, after the situation over the last eight or nine quarters where we lost each quarter 20,000-30,000 contracts.
We are we are quite satisfied with the situation so far.
Very helpful. Thank you.
Thank you. We will now take the next question from the line of Keval Khiroya from Deutsche Bank. Please go ahead.
Thank you. I've got two questions, please. The first is, in the event you don't have access to spectrum through an auction, how likely is spectrum leasing as a scenario? Is this something that the current spectrum holders are open to discussing with you? Second, your Q1 service revenue growth of 4.2% is close to the full-year guidance of 4% but still containing support from last year's fixed price adjustment. As these benefits wash out in H2, what allows you to keep the service revenue growth around the 4% level, for the second half and full year as well? Thank you. Yeah.
Regarding to your first question, whether there is an option to lease spectrum, it could be an option, but at the moment, there are no discussions or negotiations regarding that. I think the next thing that we are expecting or that we have to wait for is the decision from the Bundesnetzagentur regarding the auction or whether there will be an auction or not for the low-band spectrum. Regarding your question to revenue growth, we feel quite comfortable with the 4%. Yes, in the first quarter, we have generated 4.3%, but in our monthly budget or plan that we receive for this year and also with our pricing structure that we are offering in our tariffs, we are quite comfortable to generate the 4% growth in the service revenue.
What helps us, if we keep the customer base and the broadband business on a stable situation, with the strong upwards that we have in this business compared with the year before where we lost customers in three quarters, that will something that will help us to make sure that we can generate a 4% growth. So we are optimistic that it's something that it will work this year.
That's clear. Thank you.
Thank you. We will now take the next question. From the line of Adam Fox-Rumley from HSBC, please go ahead.
Thank you. Morning. I had a follow-up to one of the earlier questions, please. I was interested in the contribution to EBITDA growth in the access segment.
It seems clear that the service revenue is doing most of the work, but I wondered if you could comment on the scale of any contributions from other cost lines. It sounded maybe like it's too early for many benefits of the new mobile network, but if you've got anything to say there, it would be interesting. And then more generally, I suppose, looking a little bit further forward, I wondered if you could talk about your thinking between these segments. As more customers have moved on to the new network, does that create accounting allocation challenges, or is it just clear that kind of all the costs of the new network sit in one side, and any thoughts around that would be helpful?
And then very briefly, I wondered if you could just—you didn't really comment on the tax number in the presentation. Is there anything funny in that figure, or is it just a cash phasing issue too? Thanks.
Regarding your first question, in the segment EBITDA, we have a rather equal situation regarding the cost position.
So we keep the OPEX on a very low level, low increase, and there are no impacts because of, for example, savings or allocations between the segment AXIS and the segment mobile network included, so, as I mentioned in the presentation, the increase in the first quarter in the AXIS segment is mainly driven by personal expenses, marketing expenses, but, as I said, it's on a very low level, regarding your second question, maybe you can repeat your question. So I'm not sure whether I understood you with the tax issue. I was just the tax number is quite large. Just Oliver told me there is no extraordinary impact in that would be mentioned in our report for the tax amount in the first quarter.
That's definitely in line with the tax rate that, that we've seen in last year and that we've expected also for the first quarter.
Okay. Okay. Thank you.
Thank you. We will now take the next question. From the line of Andrei Dragolici from Kepler Cheuvreux, please go ahead.
Hi. Thank you for taking my questions. First one on the mobile network, customers. I mean, what makes you believe that we have more traction in customer net adds in Q2 than in Q1? Secondly, how should we understand the free cash flow development maybe over the year? Where would you expect more or less to land by the end of the year? Last one, just a clarification. You said you have 530 antennas, connected with, fiberglass, if, if I'm not mistaken. How many antennas you have available? I don't know if you said it.
You expected 1,350 for Q1. Thank you.
Yeah, to your first question, what we see is—or why we are—convinced that we can reach the 80,000-100,000 net adds in the second quarter is, on the one hand side, we changed some things in our offers, and the second issue is that we see that we have a lower aggressivity in the market. So, and we see, of course, our current run rate, where we believe, okay, the 80,000-100,000 is realistic in the second quarter. Then, to your third question, to make sure, I mentioned 530 antennas as of end of the first quarter that are where antennas are installed, and where we have fiber.
To make sure, we had a presentation in the first quarter, so we differentiated in the 530 antennas. All of these antennas are, or all of these sites, there are antennas installed. And the antennas that already are connected with fiber are 227, just to make crystal clear where we are at the end of the first quarter. And then, your question was, how many sites do we have under contract? And at the end of the first quarter, we had 1,334 sites that we have leased from our partners. To your second question, please, could you repeat it because we are not sure what exactly your question was.
Okay. That's Oliver. Maybe we can add that question at the end of the call so we can continue with Ben Ricket and his next and his questions, please.
Thank you. We will now take the next question.
From the line of Ben Ricketts from New Street Research, please go ahead.
Hi. Thank you. I had 2 follow-up questions, please. Firstly, you mentioned the coverage obligations, the 700 MHz spectrum. Do you still think the 50% coverage would be possible if you don't have low-band spectrum? That's assuming you're 12,000 sites, or would you need to build additional sites to achieve that? Then second question, thank you for all the details on the rate of migration of subscribers to the new network. I guess there's also then growth additions coming onto the new network. So how many subscribers are you expecting by the end of the year? Would sort of 6 million, 8 million, is that the sort of range we should be thinking? Thank you.
Regarding your first question, to the obligation of the 50%, of course, we see it as a realistic scenario to build up the 50% pop coverage also without low-band spectrum. As I mentioned, of course, it would have an impact on the financials, but the case would work also without the low-band spectrum. Besides that, we have an obligation out of the auction in 2019 to build up the 50% pop coverage. So that's our clear target to build up the necessary antennas that we need for this obligation or that we need to fulfill this obligation.
Regarding your question to the migration and which number is realistic at the end of the year, I think the ballpark that you have mentioned between 6-8 million is definitely a realistic scenario of customers or contracts that are in our mobile network at the end of this year.
Thank you for that. Then sorry, what sort of traffic coverage do you think you'd be able to achieve then with the 12,000 sites and no low-band? I think in the past you said sort of 40%-50%. Is that still what you're thinking?
Our assumption is that we will have approximately 60% traffic coverage with low-band spectrum and something close to 50% without low-band spectrum. Brilliant.
Thank you.
To be crystal clear, Ben, not the mentioned 40%-50% without low-band.
You have asked if Markus says around 50%. It is not; it's more the upper line of that what you have asked than the lower line, yeah?
Okay. Thank you.
Thank you. We will now take the next question. From the line of Ulrich Rathe from Bernstein, please go ahead.
Yeah. Thank you. I have two questions and a clarification, please. The first one is on the low CapEx in the first quarter. You explained why that is, but could you talk about the underlying activity levels in the network construction? Has the activity in terms of what people actually do on the ground rather than the billing issues slowed down in any way in the first quarter? And then the second question is, you have said you will build without the low-band spectrum. It gives a bit of color. That's very helpful.
I was just wondering, in what way would you adjust your plans? I mean, if you say it has an impact on the financials, that you have not really announced a very firm plan, as was mentioned earlier. So how would you potentially sort of adjust what you're doing if you don't get the low-band spectrum? And then just for clarification, you talked about a stable quarterly distribution in the context of cost discussion earlier. Could you just clarify in terms of what you said would be roughly stable quarter over quarter over quarter during the year? Was that a reference to cost, or was it a reference to EBITDA would be stable? Thank you.
Yeah. Thanks for the questions.
To your first question, to go one step back, the biggest part in the CapEx in the last two years was the CapEx to Rakuten to build up the core, the data centers, and that would be what we need on software and architecture. When we started with the operation of our network, all this work was finished. That means in the first two quarters of this year, we do not have any work from Rakuten doing in the data centers. Just as I mentioned earlier, for the two further data centers, three and four, that will be the biggest part where we will see CapEx in this year. The assumption is that we will see the biggest part of this CapEx in the third quarter.
So, in the first two quarters, most of the CapEx is driven for installing the antennas on the sites. And in the first quarter, that was a low number and will increase in the further quarters, but the biggest part of the CapEx will be the CapEx for the two new data centers that will come within this year.
I hope that will give us a bit more color on the situation. Then the question regarding the situation if we do not get low-band spectrum. The question is, what does it mean if, for example, we will not get access to low-band spectrum in 2026. Then my understanding is, or our understanding is, then we would have the next auction for low-band spectrum in 2031. So a scenario where we do not get any low-band spectrum until 2040, for example, isn't in our, yeah, is not a realistic scenario for us.
So, a scenario would be that we would have to live with national roaming, for example, for the period from 2026 to 2031. And then we would have the next situation where we would have an auction for low-band spectrum. So, as I mentioned earlier, we do not believe in a scenario where we do not get any low-band spectrum. Regarding your third question, that what I mentioned regarding the cost situation, what I meant was that the EBITDA situation will be a very, very linear situation in this year for the mobile network segment. On the one hand side, we have the OPEX that will of course increase because of the further rollout.
Besides that, we have the savings that also will be increased so that the EBITDA effect will be more or less in the range that we've seen in the first quarter.
Let me just from an IR perspective, add to this all the questions about frequency and low-band access. Only one thing. We are discussing here only a worst-case scenario, no blue-case scenario. The worst-case scenario means there is an extension for the existing operators for free without no obligation accessing, giving us access to low-band. I think we all are aware that, discussing a worst-case scenario, without any obligations on the existing operators, is nothing none of us is expecting, not even the, the peer group members. Thank you.
Thanks very much.
Thank you. One moment, please. We will now take the next question. From the line of Usman Ghazi from Berenberg, please go ahead. Hello.
Thank you very much. Just two questions for me, please. The first question was just, picking up on, the migration levels that you've indicated. So, 1 million customers already migrated at the end of April. And as you said, the, you know, the migrations only started towards the mid to end of Q1. So, I mean, that tells me that the growth additions that are coming onto your new network are at a pretty strong level. Could you confirm that? And, you know, could you indicate what kind of pricing levels these growths are coming in at? Are they higher or lower than the average output? And then my second question was just on the site buildout.
You know, could you indicate the proportion between colocations and build-to-suit that you were expecting for this year to get to your, you know, 3,000 new site target for 2024? Thank you.
Yeah. Regarding your first question, to make clear, I mentioned we have 1 million contracts or customers in our network at the end of April. These are new customers and migrations, not just migrations because you mentioned 1 million migrations, just to explain it, and yes, we are satisfied with that what we see in the processes in April after we have increased the number of migrations, and it's a very stable situation. But it doesn't lead to a situation where we see any room for higher prices or increasing the price levels.
So, the pricing and tariffs or pricing structure and tariffs that we are offering is the same as we did it in the last months. To your question, site buildout for this year, I do not have the sorry, the exact number. But the biggest part in this year of the 3,000 sites will be colocation sites. I would say 80% are colocations, 20% are BTS in the future. The part of BTS will increase, so it will be higher than 20%. But for this year, I would say a range so 20%-30% is realistic. The rest is colocation.
Okay. Thank you. And then just ask a follow-up, perhaps. Sorry, just on just on the first question.
I guess what I was trying to get at is understanding if, you know, if the growth additions to the new network, you know, are coming in at kind of the higher price level you know, within your tariff structure at the higher price levels or just, you know, the same kind of price levels as the growth adds that were coming in on the MVNOs?
On a mid-term perspective, we see this opportunity definitely, because compared with an MBA MVNO model, we believe with our own network we are much more flexible to offer, for example, higher tariffs, maybe also unlimited tariffs, which would lead to a higher pricing structure. That's something that we definitely see.
Okay. Thank you.
Thank you. We will now take the next question. From the line of Stéphane Beyazian from ODDO BHF, please go ahead. Stéphane.
Good morning. Yes. Thank you. I've got three quick ones, if that's possible. Yes. Can you hear me?
Yes.
Yes. I'm here. Yes. Hello.
Loud and clear. We hear you, Stéphane.
Oh, hello. I've got three questions. Oh, sorry. The first question is, regarding CapEx, can you confirm that 2024 will be peak CapEx or the phasing that there is potentially could lead into a little bit of slippage, into 2025? My second question is, regarding the migrated customers. Can you tell us a little more about their average experience, you know, in terms of, how often they're connected, to the network, the handover? I mean, the outdoor and indoor speeds, you know, are there still issues, that you need to fix beyond the obvious, coverage? And finally, a third question on the broadband output.
Is it possible to have an idea where the broadband output is, today and what is the growth compared to the first quarter of last year?
Thank you. Regarding your first question, CapEx phasing, of course, that could happen, but the biggest part of the CapEx is driven by investments in the further data centers. This CapEx or this investment is clear and will happen in this year. And, of course, if we would see that a part of the 3,000 antennas would be postponed in the next year, that could lead to a phasing into next year. But for the moment, we are convinced that the 380 is still a realistic target for this year. Oliver will answer the second question. So I will answer the third question regarding the broadband ARPU.
So, as you know, we didn't communicate the ARPU or the detailed ARPU for the broadband line. But what I can say to the development of the ARPU, we have seen an increasing ARPU in the broadband lines within the last year and also in the year before because of moving more and more customers in tariffs with higher bandwidth. And we see it also in this year. So in the first quarter of this year, we have an ARPU which is a bit higher than that what we have seen in the last year. So a very stable situation, increasing situation because of the yeah, let's say, migration to tariffs with a higher bandwidth and to fiber.
Yeah. Stéphane, thank you very much for your question about average experiences.
First of all, if there are questions, because the main concerns are coming from the technical situation, just drop a mail with IR, and I'm happy to respond with already done surveys. telt arif, Connect and other journalists on the one side, you know how critical they can be with respect to handover and everything else. Delivered a very sound reaction. They have tested it, and they found nothing to complain about. Even the speed is satisfactory, around 350-500 Mbit, and download is also in a very healthy manner. That is the average experience from the journalist and the press. You can send an email, and I'm happy to deliver the links to you because they are public.
Average experience about customers, to be honest, on an investor relations level, I have some of my colleagues, but also my fellow employees, already migrated. There is no complaint and no concern. You may expect a lot of mails coming into my IR box if our network does not deliver on a sound quality. So far, I have 0.0 incoming mails about complaints. Maybe that answers your questions in the beginning.
Maybe I can add something to Oliver's answer. Your question was also, what is or I understood your question, what do we made on experiences internally? So do we have a lot of customers that are contacting us during the migration process? Or do we have any problems that has to be fixed after the migration?
I can say that a very low number of customers are contacting us during the migration process, and the number is much lower than that what we have expected. We are very satisfied with the quality of the process. The customer has a very good customer experience over the whole process. We do not have any big issues that have to be resolved and that leads to a bad customer experience during or after the customer is getting the service out of our network. As I mentioned earlier, we are very satisfied with the quality of the process.
Thank you. We will now take the next question. From the line of Ganesh Nagesha from Barclays, please go ahead.
Yeah. Hi. Thanks for taking up my questions. Couple of questions from my side.
So you'll start migration to the Vodafone network from the second half of this year. But Telefónica has indicated that your contract with them will end in 1H 2025. So the question is, does it mean that you'll have double capacity between the second half of this year and 1H 2025? Or can you gradually reduce the capacity that you are using on the Telefónica network, and hence the payment will go down during that period? And my second question is, when do you expect the regulator to announce on the spectrum auction or the renewal?
Thank you. Regarding your first question, maybe we didn't make it crystal clear when we talked about migration. So in the moment, we do not migrate into the Vodafone network. So the Vodafone agreement that we have, there is agreed that we can start earliest in July this year, latest in October this year.
So somewhere between 1st of July and the end of October or, sorry, beginning of October, we would start with the migration to Vodafone. At the moment, all migrations in our network are receiving national roaming from Telefónica Deutschland. Regarding your second questions to when do we expect the decision from the German regulator? So, the public information from the German regulator is that they will make a decision in summer. So that can mean in July. It can also mean end of September or September. We do not have an exact date. There are some dates mentioned in the market from other competitors. But we, I say or we say that what we heard from the Bundesnetzagentur is that they will make a decision within summer.
Maybe to add there, there was last week a yellow press source on the internet indicating a leaked agenda of a future meeting with the Bundesnetzagentur and a lot of stuff of interpretation that also mirrors worst-case scenario for our case. We are eager to experience what the Bundesnetzagentur may deliver publicly, but we are discussing only worst-case scenarios in this situation. Thank you.
Thank you. We will now take the next question. From the line of Siyi He from Citi, please go ahead.
Thank you for taking my questions. I just have two quick ones, please. The first one is on the Net Adds. And you indicated that you expect Net Adds Mobile to improve meaningfully in Q2.
I just wonder if you can give us comments on how we should think about for the rest of the year because it seems that if you maintain the run rate for Q2, the 200,000-300,000 target is not hard to achieve. And just wondering if there is any headroom that you embedded in your guidance. And the second question is on the fixed ARPU and price increases. Obviously, the price increases have supported the fixed ARPU improvement. And if we're looking beyond, do you think that price increase is still something possible, or we should look at organic upgrading from VDSL to fiber? And I think in your comments, you said the fiber take-up is still a little bit slow. I just wondering what you plan to do to accelerate the transition. Thank you.
Regarding the Net Adds, for Q2 or for the whole year, we still believe in the 200,000-300,000. It's too early to give an indication. For example, can it be more because of the good migration processes? So we just started with the migration. And I think we need the second quarter to get more experience, whether the current situation will continue in the next quarters or maybe we will be faced with new problems. That's something that we have to wait for. So we are, as I mentioned earlier, satisfied with the process so far.
but we have to wait for the second quarter until we have more experience in the migration process. Regarding the Fixed Net ARPU, we do not see a situation where we can talk about price increases. I would say we have competitive offer in the market with our pricing. There is no room for price increases, and yeah, it's a stable situation, but not with room for improvement. Regarding to your question, or how can we accelerate the fiber sales or yeah the orders in the fiber segment?
At the end of the day, it depends on how Deutsche Telekom and our other partners are increasing their footprint, their coverage. And the biggest part, of course, is the coverage from Deutsche Telekom. So, we will have a situation within the next years that the coverage will increase. And that also will, of course, lead to a situation where we definitely see for us more opportunities to increase the number of fiber tariffs that we are selling right now.
Thank you. I will now like to turn the conference back to Oliver Keil for closing remarks.
Thank you very much, operator. And thank you to everybody for giving us the opportunity discussing your questions. As usual, we will be available for further discussions, for follow-ups in the afternoon.
I may now return to the operator and, after a short break, wishing you an interesting meeting in the call with our parent company, mother company, United Internet AG. We wish you all the best. Seeing you soon in the future. Stay healthy, and bye-bye.