Good morning, everyone, and Welcome to our Q1 2022 conference call. During this conference call, our CFO, Markus Huhn, will first go through the highlights of the first quarter 2022, and then walk through our financial numbers and presenting the latest update for the build and the rollout of our 1&1 mobile network. After that, as always, we have time for the Q&A. With that, I hand over to Markus. Markus, thank you.
Thank you, Oliver. Good morning. This is Markus speaking. Warm welcome to all participants in the call from my side as well. I would like to give you an overview to the performance of Q1 and the financial results. Please let us step into the presentation with slide number four, the customer base. We've increased our customer base with 60,000 new contracts in the first quarter, + 90,000 mobile contracts, and a decrease of - 30,000 broadband lines. These numbers are reflecting that what we have already mentioned during our last call in March this year. The growth in Q1 is encumbered by - 90,000 contract leavings, because of the latest amendment of the Telecommunications Act.
Our operational performance without this negative impact is + 150,000 contracts, which is above the Q1 performance in 2021. As we have already explained in the last call, we see this impact as a temporary impact in this year because of the shorter cancellation period of one month. To understand this issue, you have to differentiate between the moment when the customer cancels his contract and the moment when the contract will finish. Before the last amendment of the Telecommunications Act, there was a minimum of three months difference between the moment of cancellation and the moment of finishing the contract.
After the last amendment, in many cases, there is just a difference of one month instead of a couple of months, which leads temporarily to a higher number of leavings. The conclusion is the number of cancellations is still on the same and a low level, but we have temporarily a higher number of leavings because we have to close the contracts earlier than before. Let us go to revenue on slide number five. You can see revenue in first quarter 2022 with EUR 975.9 million, which is more or less the same as in the year before. Service revenue with EUR 789.1 million and a + 3.5% is still on a solid growth path.
The other revenue, mainly hardware revenue, is below 2021 with -11.7%. This is caused by a lower number of transactions and a lower demand out of our customer base for new smartphones. Furthermore, we have a shift between the first and the second quarter in later delivering the deliveries of smartphones to our customers. Let us go to the EBITDA by segment on slide six. In the Access segment, we have realized EUR 195.4 million in the first quarter, which is a solid increase of 11.6% compared with the year before. The year before in the EUR 175.1 million. This amount doesn't include the EUR 34.4 million non-recurring income in 2021, as already.
Also mentioned on the slide number eight, the -EUR 8.3 million EBITDA in segment 1&1 mobile network is including our activities for the start of the rollout of the network. Now, I would like to go on the status of the 1&1 mobile network. Slide number eight. On the slide number eight, you see the issues that have already been realized since 2019. While the negotiations and the agreement for national roaming took 2.5 year, we could start with the negotiations of the contract that we need to build up the network in 2021.
That means we had one year to prepare all the necessary agreements that we need after we had finished the national roaming agreement in May last year. Most of the topics and issues have already been mentioned in our last calls. There are two new topics since our last call. One is the new contract with GfTD and the contract with American Tower Corporation for co-location. Both contracts have been signed in April this year. On the next slide, after we have all partners onboard that we need, our target is to be able to start with the operational or to operate with the 5G net within one year.
Therefore we have planned some milestones that you see on this slide. In Q3 2022, we will realize the connections to internet nodes, approximately 40 public and private peerings. We will start a friendly user test in the Frankfurt/Main area. In Q4 2022, we start with the operations of approximately 140 regional edge data centers, with 24 decentralized edge data centers and with two core data centers. Of course, at the end of Q4, we have to finish the first 1,000 antenna sites. We will also launch our first product, which is a fixed wireless access product. In Q1 2023, we will build up the connection to national and international telecommunication networks.
End of Q2 2023, we are able to start with national roaming. Then in Q3 2023, we will start with the operational of the 5G network with all of the four core data centers. We will have the full functionality of national roaming, and then we will also start with the marketing launch and parallel to that, the cessation of the MVNO sales. These are the main or the most important milestones in the next 12 years. 12 months, sorry. On the right-hand side on the slide, you see the obligations that we have to fulfill. The first 1,000 sites per end of this year. And the 50% household coverage end of 2030.
Our plan is to have this household coverage much sooner than we need for the obligations. Now we come to the key financial figures for the first quarter. I would like to start with the P&L, slide number 11. Revenue has already been commented. The cost of sales grew up from EUR 651.5 million in 2021 to EUR 659.5 million. Gross profit dropped from EUR 322.2 million - EUR 316.4 million. In the first quarter of 2021, we had already mentioned positive non-period impact of EUR 34.4 million, which is included in the cost of sales.
Without this impact, the operational gross profit in 2021 was EUR 287.8 million, which leads to an operational increase in the operating gross profit in Q1 2022 of +9.9%. Costs for distribution increased from EUR 114.3 million in 2021 to EUR 120.7 million, which is driven by higher spending in marketing. The administration costs were EUR 30.8 million, more or less on the same level as in the year before. The other operating income and expenses with EUR 5.6 million are also in the range of what we've seen in the year before.
We have an increase in the impairments on receivables and contract assets from EUR 17.9 million in 2021 to EUR 23.7 million in Q1 2022. The profit from operating activities in the first quarter is EUR 146.8 million, in the EUR 162.6 million in the year before, of course, is also the non-period impact included. If we eliminate this impact, we would come to an operational profit increase of approximately 14.8%. Financial result with -EUR 1.6 million is including the spending for the investment in white spots.
To remember in the auction 2019, we have agreed with the government to pay the frequencies over 12 years in installments, and we gave the commitment to invest EUR 50 million in white spots. This investment is reflected in the position financial result. We come to a profit before taxes of EUR 145.2 million. Tax expenses with -EUR 43.6 million, and a consolidated result of EUR 101.6 million for the first quarter 2022. On the next slide, you see the balance sheet. The balance sheet in total rose from EUR 7,063.7 million as end of 2021 to EUR 7,090.4 million as of end of Q1 2022.
There are two main changes in the balance sheet. One change is an increase in the short-term assets of EUR 46.1 million, which is driven by investments in the free cash flow with United Internet, and the reduction of short-term liabilities by minus EUR 65.9 million. On the next slide, you will see the cash flow. The cash flow, the net inflow from operating activities with EUR 83.9 million in Q1 2022, which is lower than in the year before. The reduction is driven by changes in trade and other receivables and payables with minus EUR 59.8 million. In the year before, the balance of this position was plus EUR 11.8 million.
That's the main driver for this lower net inflow. The cash flow from investment activities with -EUR 77.4 million. In this position, we have the EUR 21.3 million CapEx and EUR 56 million investment of free cash flow with United Internet. We have the cash flow from financing activities with -EUR 4.4 million, rather equal to the year before with EUR 4.1 million. We finished the first quarter with a free cash flow of EUR 62.6 million. On next slide, we have the EBITDA bridge. We start with the EBITDA in Q1 2022 with the EUR 187.1 million.
We have the negative balance out of the trade payables and other liabilities that I have already mentioned on the slide earlier, with -EUR 56.5 million. The negative impact of - EUR 13.3 million out of the other working capital positions. Taxes with - EUR 33.4 million and CapEx with - EUR 21.3 million. We come to the free cash flow in the first quarter of EUR 62.6 million. Now I come to the forecast 2022. We would like to confirm our forecast for this year with service revenue of approximately EUR 3.2 billion. EBITDA on a previous year level of approximately EUR 672 million. In this EBITDA forecast are EUR 70 million included for the 1&1 network costs.
The operating subscriber growth, we see approximately 650,000 new contracts, - 200,000 contracts, which comes out of the shift to the recent amendment of the Telecommunications Act. We see also the EUR 400 million cash CapEx, which is mainly driven by a 1&1 mobile network for antennas, computers, and software. Many thanks for your attention so far. Now I would like to hand over to the operator for the Q&A session.
We will now take our first question from Jonas Blum from Warburg Research. Please go ahead.
Yeah, good morning. Thank you for taking the questions. Three from my side, please. Firstly, with regard to the potential last mile price regulation in Germany, you're just foreseeing lower pricing. Can you just quantify for us the positive impact you could expect from this? And is it already included in your guidance for this year? Secondly, with regards to the GfTD contract, just wondering, are you fully assuming CapEx for this contract within 2022? And is it fair to assume roughly EUR 75 million for the 500 sites? And do you expect a subsequent sale and leaseback? And finally, since you mentioned in your presentation 50% household coverage that you want to achieve much sooner, could you just share with us what's your internal ambition here?
Yeah, thanks for the question. The impact from the price regulations for the telco is included in our forecast. It's not a high amount. It is a low single million EUR impact in this year. Regarding GfTD, in this year it will be CapEx. We have already mentioned earlier, it could be an option to sell these sites that we build up with GfTD to a TowerCo. That's something that we are negotiating at the moment. At the moment, we do not have agreement for that. The assumption is that it will be CapEx in this year. It's included in our guidance.
An option can be that we will sell it, sell and lease back. To the last question, when do we see the household coverage of 50%? At the moment it's too early to give a clear indication. At the moment we are in discussion with our partners. Of course, we have agreements with them and also a clear understanding what the partners have to deliver to fulfill the obligations and to fulfill them much earlier. That will be an information that we will give on a CMD event.
Thanks a lot.
We're gonna take our next question from Ulrich Rathe from Jefferies. Please go ahead.
Thank you. I have two questions, please. The first one is a more technical one on the churn from the disconnections from the telco law. There seem to be mainly two explanations by different players in the industry for the impact. One is what you outlined, which is that the actual contract end is bunched because the period you know between cancellation and the contract end is shortened. The other explanation is that there are a lot of stranded contracts out there, mostly because of attempts to sort of get subsidized or installment devices on installment terms. Now, there's a difference between the two.
In the first case, in the scenario that you are highlighting, there would be a deeper churn pool because, you know, if people cancel their contracts earlier and sort of this bunches up, then those people would be seeking new contracts, presumably. Whereas in the second scenario, the industry at large would actually lose contracts because they are stranded contracts. Could you just comment on that, on those two scenarios a little bit? Which, you know, what do you see as the most likely distribution between these two effects in your base? And to what extent, you know, what you're seeing is really an industry reduction of subscriptions compared to sort of just a deeper churn pool for some to lose, for some to win.
The second question is a bit shorter, I promise, is on network quality. When you launch your network and you outlined helpfully the milestones towards the fully fledged mobile network launch, do you expect at that point to have a quality network that supports the sort of pricing that you have in the market, which is not a discount pricing? You know, certainly not for the 1&1 branded customers. Or do you anticipate that this will be a network where you probably are forced to give some discounts for, you know, the initial quality for some initial quality issues?
Just wondering how you look at sort of 3Q 2023 and the network quality that you will be able to deliver at that point in time? If you're sort of already discounting a bit of a headwind there. That would be great. Thank you.
Yeah. Regarding your first question, we do not see a negative impact on, yeah, let's say conversion rate or orders that are trending because of the installments. So, on the sell side, we have more or less quite the same conversion rate that we have seen before the amendments of the Telecommunications Act. Whether the process is much more complex than before. So we see two impacts because of the Telecommunications Act. One is the impact that I have mentioned earlier in the presentation, with the contracts that leave the base earlier.
Another issue is that the lock limit where you can stop the service to the customer. This lock limit has been increased from EUR 75 - EUR 100. That means that you have to give the service to the customer much longer even he has outstanding payments. This is a higher risk for bad debts. But it's not a big impact, but it is a impact.
These are the two issues that we see out of the Telecommunications Act. Regarding your second question to the launch of the network, our expectation is that the quality of the network will be minimum on the same standard that we see today. We do not plan to give any discounts because of any quality problems that we expect. That's not the case. Thank you very much.
We will now take our next question from Andrew Lee from Goldman Sachs. Please go ahead.
Yeah. Good morning, everyone. Thanks for taking the question. I had two, hopefully three questions. One was on your application to be able to use Freenet as a distributor. You submitted that application, I think, to the cartel office. I wonder if there's any progress in being able to on that front. Then secondly, we've seen the removal, or it looks like we've seen the removal of some low-end price promotions in the German mobile market. I wonder if you can just comment on, well, the trajectory of competition at the moment that you're seeing and also whether how much of that you think is related to cost inflation pressures that you and your competitors are facing. Thank you.
Regarding your first question, discussion or negotiation with Freenet. There are no discussions or negotiations ongoing. There we can not give any further information, or there's no negotiation ongoing to this issue. Regarding your second question to the mobile market and the competition landscape, well, we do not see any big changes in the prices. Our impression is that every player in the market is aiming for keeping the prices on a stable level.
We do not see big aggressive offers in the market, but we also do not see any changes that, for example, competitors are increasing the prices because of the inflation rate that we are currently seeing. We would say more or less the same situation that we have seen in the last months, quite stable.
Thank you.
We will now take our next question from Martin Hammerschmidt from Citigroup. Please go ahead.
Yeah, thank you very much for taking my questions. I have a couple please. The first one is, I'm sorry, I missed it in the presentation. If I think about the timing of the capital markets day, now I think all major deals are signed. What is still missing to present a network case to the market? And when can we expect that? The second one is, could you maybe share your initial thoughts on how we should see EBITDA in 2023 developing, at least directionally? Because if I think about the different building blocks, so you have all the major infrastructure deals signed now, and I think the costs should start to kick in.
The cost savings from migration, they only really kick in in, let's say, 2024. I think is probably where most of it starts. It's fair to assume that EBITDA should be rather stable versus 2022. I think currently consensus expecting a growth of roughly EUR 20 million. Maybe the last one is on the 800 MHz. When you've seen the latest comments from Bundesnetzagentur last month that seemed quite supportive of 1&1. Could you maybe share your thoughts here? Thank you.
Hi, Martin. Let me step in first for the question when a CMD. As management has indicated in the balanced press conference in March already, we are pretty much aware about inviting for a CMD in the second part of 2022. We are not very open-minded to indicate whether it is the beginning of Q3 or beginning of Q4. You are right. We have discussed that once we have all the pieces together, we invite. There are not all pieces together. There is still an ongoing negotiation which we take advantage of. Be aware that we are fully aware about necessity to share more transparency and disclosure, but we are shy about giving a specific timeline or even a calendar week. For the other question, I hand over to Markus. Thank you.
Yeah. Regarding your question to the EBITDA for the next two or three years. That will be an information that we will give on a CMD. We can't give you our own indication for the next two or three years. Let us do it on the CMD to give transparency on how we see the development in the next year to the rollout of the network. Regarding your question to the 800 MHz, Bundesnetzagentur has communicated. It's yeah, not allowed to us to comment on what Bundeskartellamt is giving us information in the market.
We are on the same position that we have communicated in the first quarter. We are quite sure that Bundeskartellamt understood our point of view to this. Unfortunately, we do not expect any decision in this year, that's what Bundesnetzagentur has communicated, that a decision to the situation with the 800 MHz will be made in 2023, not earlier.
Again, if I can just quickly ask a follow-up on what Oliver just said, and that you are still in negotiations. What kind of negotiations, so rather with whom are you still negotiating? Thank you.
Hi Martin, Oliver again. Let me answer in that way. It took us more than 2.5 Years, roughly 2.5 Years, only to agree a national roaming agreement with the support of the EU regulators. From that point, it took us only one year to secure every contract with every of our partner network. There is one missing. To indicate, I can only refer to what is public. We all know how Cellnex is leading through their calls that they regard an opportunity with a new entry in the German market as a proper one. That having been said from the peers in their respective calls.
Please understand that I don't want to give any hint or to rouse any speculation about what we are missing. We are on a very good way, and otherwise Markus has not outlined that we are able to cover the 50% much sooner than expected and of course, much sooner than 2030. Be a bit patient, or I have to ask kindly for a little bit of patience, and we can inform the market once we can come out with the final information. Thank you.
Will do. Thank you.
We will now take our next question from James Ratzer on New Street Research. Please go ahead.
Good morning, Oliver and Markus. Yeah, two questions from me. I really appreciate the network update that you gave and the business commitment you're making around reaching 50% of households. I mean, given the confidence you're showing there, I was wondering if you could share any updated thoughts on the percentage of your network traffic that you might be able to offload onto your own network in that situation, both if you have the current spectrum you have and also in the situation that you are able to get access to the 800 MHz. Thank you.
Our assumption is still that we will have traffic coverage in a range of 55%-60% with the 800 MHz spectrum. That's still our assumption that we have for the case.
Markus, what would that be if you weren't able to get the 800 MHz, please?
This is no scenario where we are thinking about one at the moment. We are quite sure that we will get access to the 800 MHz spectrum, and therefore we believe in the traffic coverage that I have mentioned.
Okay. Interesting. If we're talking spectrum, I mean, do you have any views at this stage on the upper 6 GHz spectrum? Is that something that's starting to appear on your radar screen at all?
Hi, James. It's Oliver again. If we speak about spectrum, as Markus had outlined, one can relate to comments of the peers where, for the 800 MHz and the 2.6 GHz, which is up for auction in 2024, 2025. There's a gap in the opinions. 1&1 and the peers are saying of course, whatever comes up 1&1, it is obvious they have to be included and that is what we are focusing on. Your question about the 6 GHz maybe that is something for the future. Thank you.
Yeah. Thank you.
We will now take our next question from Titus Krahn from Bank of America. Please go ahead.
Good morning, everyone. Thank you very much for the presentation and for taking my question. I have just two from my side. The first one, maybe I've missed it during the presentation, but on the pacing of the cost for the network rollout throughout this year.
First, thanks for giving us a roadmap on the network plan ahead, but I just wondered if you could give any color on both the OpEx side as well as the CapEx side, throughout 2022, if that's rather something for the second half of this year or rather evenly distributed, given that you're running currently quite below your full year guidance. Then a second question a little bit on your fixed wireless offer, which you're planning to launch this year and before the mobile network before the mobile offer is coming from 2023. Could you give an update on maybe the preparations and your market strategy for the segment? And to what extent do you expect an impact on consumer numbers and financials? Probably not much in 2022, but in 2023.
Yeah, thanks for the question. To your first question, the OpEx as well as the CapEx are back-end loaded in this year. We will see an increase in the second quarter. The main spendings in CapEx and OpEx for the 5G network will be in the second half of this year. What will be the share? I would say 70%-80% will be spent in the second half year. Regarding your question to the fixed wireless access product, we are currently in discussion. We have two main focus on realizing the technical issues or topics that we need to offer this product.
What exactly will be the prices and the areas where we'll start the launch? That's something that we will do in the next two quarters. I think we can give more color in our half year press conference on that. To tell you or to give you more information to the offer, at the moment, it's too early for that.
Okay, understood. Thank you very much.
We will now take our next question from Usman Ghazi, from Berenberg. Please go ahead.
Hi, everyone. Thank you. I've got two questions, please. My first question was just you know looking at what DISH in the U.S. was saying at their capital markets day on Open RAN and because the Open RAN equipment was so much smaller that they are able to get a lower rental from the TowerC o because you know the wind load is significantly lower because obviously you're having less equipment on the tower.
Just wondering if you're seeing similar economics in your discussions with the German TowerCo s where, you know, I mean, the equipment you'll be putting on is a lot smaller, therefore, the rates that you're getting are significantly lower than what is kind of public about the lease costs on from TowerCos . That was the first question. The second question. And also, sorry, just linked to that. I mean, are you seeing that because you need less space on the towers, less space on the rooftops because your equipment is smaller, that the co-location opportunity is actually bigger than would otherwise be the case? That was kind of the first question.
The second question was just on fixed wireless access. I mean, in which areas will you choose to launch this product? Is it in cities or in areas where there's DSL? I mean, how are you going to go about choosing where you're gonna launch this service? Thank you.
Yeah, thanks for your questions. Regarding the situation in the U.S. that you've explained, we do not have any information at the moment that we have here a comparable situation. That's something that we at the moment not see. Something that we can check with our technical colleagues and to compare, do we have here in Germany a comparable situation as in the U.S.? At the moment, I can't give you an answer on that. Regarding the areas where we would like to start with the FWA launch, it depends, of course, on the first 1,000 antennas that we have to build up.
We have in the obligations a clear regulation on which part of Germany we have to build up to 1,000 antennas. Then we have to look where our customers are located, how is the situation with the bandwidths that these customers have. Then we will go on with our marketing strategy. It will be a strategy where we have to look where the antennas are and how is the situation with, for example, VDSL or FTTH coverage. Then we can decide where can we make good offers for FWA product.
Thank you. Just a follow-up, sir.
[crosstalk], let me step in. Usman Ghazi, follow up. Let me step in, please.
Mm-hmm.
Because you have mentioned the DISH CMD. I think what one has to highlight is, and DISH did this quite well, that the technology is proven, so it is not an O-RAN situation or an O-RAN problem they are facing. I think what the difference to our approach is, we have a hybrid approach, a 4G, 5G approach, whilst they are starting with 5G standalone. For us or for them, it is the problem that currently they have only that expensive Huawei hardware, whilst our customers can work with their 4G enabled and 5G enabled hardware. The second point is, our spectrum so far is not as symmetric as the spectrum of DISH is.
The next point, or one of the important points, we have secured a national roaming agreement with the support of the EU regulation-wise. It is pending still in the United States. I think with our proven distribution channels, we are not impacted by any negative cross-read from the DISH CMD. Thank you.
Thank you. That's really helpful. Just to follow up on the fixed wireless access service comments. Is it that the fixed wireless access service will be limited to these 1,000 antennas that you're building, or are you going to broaden the service over time with the, you know, as you are increasing coverage?
No, it's not just for the 1,000 antennas. That's just the starting situation at the end of this year. Of course, we will through our marketing campaigns parallel to the growth of our network. It's not just an offer which is limited to the 1,000 antennas.
Okay. Thank you very much.
We will now take a follow-up question from Ulrich Rathe from Jefferies. Please go ahead.
Yeah, thank you. Two quick questions. The first one is, in fixed, I think there was a comment on the fourth quarter call that you just don't wanna put marketing budgets into legacy and your technology, and you're waiting for proper fiber FTTH availability from Deutsche Telekom before sort of restarting this and ending the current small, but still persistent, customer losses. Could you comment on progress with that? I mean, if in the first quarter it was still negative at about the rates of that we observed in the quarters of last year, so there's no slowdown yet. Could you comment on the rate at which fixed net adds might improve?
The second question is, in the first quarter, given that you were facing this higher rate of disconnections, did you take countermeasures by marketing a little bit harder, maybe trying to, you know, grab a bit more customers in the acquisition, on the acquisition side? Or did you simply see this as a, you know, externality that you gotta weather and probably better not to disturb the market by pushing against it? That would be helpful. Thank you.
Yeah. Thanks for your questions. To your first question, the plan currently is that we will start end of Q3, Q4 with a fiber campaign. First impact out of the campaign, we will see earliest in the fourth quarter. At the moment, we are doing some tests, and we are starting with the offer, but a campaign is planned for the second half year. Regarding your second question, we have not been more aggressive in the first quarter to compensate that what happened on the leaving side.
We are driving with the same CPO targets with the same prices in our campaigns. We saw a small positive impact on the discount side. But basically, in the first quarter, we have seen that what we have expected, and in summary, it was quite comparable with the situation that we've seen also in the first quarter of last year.
We will now take our next question from Adam Fox-Rumley from HSBC. Please go ahead.
Thank you very much. I had two, please. One was a bit of a follow-up on that second one from Ulrich, actually. If I look at the access segment, you managed year-over-year, you've done EUR 27 million more service revenue and EUR 20 million more of comparable EBITDA. I guess I'm just slightly curious to know what was going on with the cost base. I couldn't quite make it out from the slides that you were showing earlier, whether or not you maybe in fact cut back on some marketing in first quarter or it seems like the kind of marginal profitability was very strong in the quarter. My second question is on the state of the discussions with American Tower.
Obviously, you announced the framework agreement, but I wonder if you're expecting to be able to give guidance about the kind of range of cell sites that might be on the table with those guys as you have done with Vantage already, whether that's something that's achievable in the short term, whether we have to wait for the Capital Markets Day or maybe there's just you need to keep that more open-ended towards the latter part of the project. Thank you very much.
Regarding your first question. In summary, we are very satisfied with that, with the development of the EBITDA and also the margin. There is not any extraordinary impact or effect in the first quarter. We have been able to realize some optimizations in the cost of sales. Basically, we are in a quite stable situation regarding margin and costs for smartphones. We've also been very consistent in our offer. We are aiming for getting a good customer value via the new contracts that we are generating.
As a result, we see that what we've seen in the first quarter, which is a strong EBITDA growth. Regarding your second question to ATC, we have agreed with ATC that we will not mention any ranges for co-locations that we see at the moment because we are still in discussion with ATC about the opportunities and the chances that we see. After we have finished the process, then we will be able to give a number in the market, how many sites do we see in this cooperation. That's something that we've agreed with ATC.
Got it. Okay, thanks very much.
As another reminder to ask a telephone question, please signal by pressing star one on your telephone keypads. We will now take our next question from a follow-up question from Martin Hammerschmidt from Citigroup. Please go ahead.
Yeah. Thank you. On the questions like on the handset sales, we've seen Telefónica Deutschland yesterday posting quite strong handset sales versus yours came down so this quarter. How do you explain the discrepancy here? Is that a function of Telefónica and just pushing it more from what you can tell? Is that just phasing? So, are there any other factors at play here? Thank you.
Yeah. We've seen that Telefónica is pushing their bundle offers very strong at the moment. What we see on the new customer side, we are in a stable situation, comparable numbers with the year before. What we see or what we've seen in the first quarter is a much lower demand out of our customer base. That's something that we've seen two years ago also. It depends on the campaigns that we have driven two years earlier. It's not an impact in our opinion because of higher competition in the first quarter. It's more an issue which is coming out of our customer base.
The further impact is that what I've mentioned earlier, because of a delay in receiving smartphones from our vendors at the end of Q1, we've not been able to deliver all smartphones in the first quarter, though we have a certain number of smartphones that has been delivered in the second quarter. Even the contract with the customer has been signed in the first quarter. That's our view on the situation so far.
Thank you.
We will now take our next question from Stéphane Beyazian from ODDO BHF. Please go ahead.
Thank you. I'll try with three. The first one is just to follow up on DISH and their network presentation. They made the point that eventually they expect their network to allow them to move from competitive pricing to disruptive pricing. They gave some examples such as the Iliad and in Italy. Obviously, you know, Germany is a very different market, and you're in a different position to DISH in the U.S. I was just wondering whether there was you know, anything you could comment about that. The second thing is regarding the plan to cover much sooner than expected the population in Germany. I mean, you have the consensus.
I understand, you know, consensus of EUR 400 million CapEx, and you know what is in consensus for OpEx for 5G. I understand that you want to wait for the CMD. Without being too specific, conceptually, if you go faster in your rollout, could that mean that you may have to spend a little more in the next two-three years than what is currently expected? Third question regarding, is it possible just to remind me what possible prepayments you could do with the Deutsche Telekom in your 2022 cash flows? Thank you. I'm thinking about prepayment for broadband, obviously.
Hi, Stéphane . It's Oliver again. Your question related to DISH and the network quality is low and the prices and the price disruptiveness. As far as I was on the call as well. As far as I understood, the management of DISH is confident in the O-RAN architecture. But they were highlighting the issues about, I think Usman Ghazi has asked before, the national roaming agreement, which is still awaiting the Department of Justice approvals and the spectrum, which is not the very best. On the other side, I think a very advantage on our side is our proven distribution and our entire customer ownership.
What is important from my side on investor relations is there are no concerns about the technology, about the O-RAN architecture, but they have other things they have to solve. Thank you.
Yeah. Regarding your question to the CapEx for the 5G network. The guidance that we gave for this year, the EUR 400 million. We also gave an indication that the CapEx next year will be lower than the CapEx in this year because we have to spend in this year CapEx for building up the data centers. This will be, let's say, a one-off. Next year we will have to spend CapEx, for example, for antennas, but not in core data centers again. The range or the guidance that we gave for the CapEx is including our plan that we will have the household coverage much earlier than 2030.
It means if we are much earlier than 2030, it will not lead to an increase in the CapEx guidance. Regarding your question to the payment to Deutsche Telekom for our broadband access, it will be in the same range that we have paid in last year. Last year in 2021 it was approximately EUR 200 million. In this year it will be a bit lower, but in the range of the EUR 200 million.
That's very clear. Thank you.
There appears to be no further questions at this time. I would like to turn the conference back to the host for any additional or closing remarks.
Yeah. Thank you. It's Oliver again. Thank you for your time and for your interest. Yeah. What to say? Goodbye and enjoy the upcoming call of our mother company, United Internet. Take care. All the best for all of you until we meet or speak in person again. Thank you.