Thanks everybody for joining on this foggy Friday morning in Hamburg, for our presentation on Q3 and year-to-date results. I'm jumping into it because I'm sure that you have all already read our publications. Overall, we are very happy with the year-to-date results. Subscriber base, in total, is still growing. We go into some details later on. EBITDA is EUR +3.4 million compared to previous year, and free cash flow with EUR 220 million is also performing very well. That's a growth of almost 10% compared to the previous year. Ingo Arnold will explain a little later what our projections are for the rest of the year, and what opportunities we might take out of the positive free cash flow. Going into more detail, some of you have already commented it. I think postpaid works really well, with relatively good growth and continuous growth for a lot of quarters meanwhile.
The business is working really well. We have adopted the channel mix more towards online and direct, not only as a result of the new normal situation, but also on purpose and as a result of an ongoing proper management of the channel mix. We have added here FUNK and FLEX, the pure app-based tariff plans. We keep it separate for the moment. You see also there, we are still growing. We are not investing here in marketing so far. This is really word of mouth, and the pure success of the product model. Waipu.tv, compared to previous year, significant growth. We have told you that in Q3 we do not expect any growth there, so I think the small 1% growth is a confirmation of the success of the product. Still, there were no real interesting events on TV.
freenet TV is certainly a bit disappointing also to us from a pure RGU perspective. When you do sensitivity on the new price tag, you will join our thought that this will be overcompensated by revenue and specifically by the margin growth. We have expected some of this churn, and I will come back in a second again. Some of what I said is listed on page six of this presentation. What were the key topics and the key achievements of these past three months? I think the Corona limitations were hitting us in the early days or mid days of March. We have soon and fast adopted to the situation. We've told you that even April, one third of our shops were still open. We have changed some of the opening hours. We have combined our outbound activities on telephone with the new shop system.
We have set up a number of initiatives to still use the shops as a primary contact point for those customers who are starving for this kind of methodology, and we continue to do so. freenet FLEX was launched, once again, a tariff plan, which is pure app-based. The tremendous thing is that the entire, very painful and difficult customer journey in Germany with entry of private data, ID data, copying ID, et cetera, is bypassed in that product. We see that adoption rate and Net Promoter Score on these products are really great. We have signed after a long discussion and specifically a long technical process, we can now start to put Netflix as a core subscription for waipu, as well as the product portfolio in mobile. Last but not least, Gravis with a very strong year 2020, is now assigned to be an Apple education partner.
On TV and media, well, the launch of waipu and the combination bundles with Netflix is certainly a breakthrough, also in the perception of our competitors and very much so from the German channels. I think that was a really great deal by all means. We've started and launched on 3rd of October, so the German national holiday, the second so-called national multiplex on Digital Audio Broadcasting. We are now bringing in the first couple of channels, which are our own, and we have four partners that have already launched their channels and are now available nationwide. On group level, and Ingo will talk about some details on it, I think we are very happy that, I think next week there is the new EGM of Sunrise and UPC. We do the proper handover. This all worked really well.
We will get the money very soon and then have the respective inflow of almost EUR 1.1 billion. Respectively, we have already started, prior to this, the share buyback as a compensation for the non-payout of our dividend for 2019. For the, I would say, intense discussion with you, we have tried to give more transparency and more insight into our channel mix and into our multi-channel strategy. On page seven, you see that we are split it in the gross adds and the renewal. You see that in gross adds, the retail, with 43.6%, is by far more important than on the renewals. The driving force here is our partnership with MediaMarktSaturn, which is incorporated, and their share on renewals is really low. These renewals are all done directly with non-retail, so not in a brick-and-mortar location. Why do we believe into this multi-channel strategy?
Do we know whether we're still here? Still heard? Okay. I was just told that this was only a strange noise in our phone here. What about non-retail and that all kind of direct channels? The amazing thing is that we can optimize, change the campaigns, change pricing, test pricing, test combinations, all these things on a basically real-time daily basis. The majority of this optimization is system-based based on our business intelligence knowledge, and it's AI-driven. We can adopt to any competition, to any short-term opportunity, really fast, really close, and this is the big advantage of direct-to-consumer activities. By the way, we include here that also our partner, MSH, the Media-Saturn, is meanwhile contributing a significant part of their growth adds also through their direct channels to their websites and through their apps. The good thing is that you're very fast.
Unfortunately, where there's always the other side of the same coin, in this field, you have way more competition. There's a high transparency, and our competitors, you name them, Vodafone, DT AG, Telefónica, United, they have basically the same tool set. It's a constant rush to work against your direct competition. You try to outsmart them, obviously, but it's very transparent, and this is also why the online channel is not always really cheaper. What is the big advantage in the USP of retail or brick-and-mortar? This is transactions and interactions with a high human element. It's typically based on relationship. This relationship creates the opportunity for upselling, be it warranty extensions, be it insurances, be it any of our Digital Lifestyle options. These things work way better with the human interaction. I think we've all experienced this.
Most likely, we are all customers of Amazon, we tend to order three items a day with Amazon one by one, not taking into consideration that you get three packages, that there's three times postage and handling, there is three times all this. Even though Amazon is certainly the world expert in dynamic pricing and all these elements, still their cross-selling is very weak. I think we all experience it. There is a certain proportion of individuals that prefer the human interaction, our concept of local hero stores really works out well. The conversion in these elements of upselling and cross-selling and attachment rate is super high, this is why if we continue to do so successfully upsell to the core product, retail remains a profitable and very important channel.
The second perspective that we take on our daily channel split is that we differentiate between captive channels and non-captive. How much of those interactions do we have to pay third party, and how many of those transactions are not in full control? On this page, you can see that the total amount of renewals and gross adds, 39 %+ 31%, are handled via channels that we are in full control, and we can handle in full control. The same goes for the TV segment, where only 20% of the transactions are handled purely by a third party, where we cannot influence the entire customer experience, the entire customer journey.
This is an overall trajectory which we want to continue, and we think this is the most important part of the strategy, to get into the full control, to deeply understand the customer journey, to optimize the click path, et cetera, as well as to individually talk to the customers and to review how they enjoyed or not enjoyed the interaction. On page nine, we continue with freenet FUNK and FLEX . These are the perfect example of these direct interactions. There is no intermediate selling these products. It's just our own team that runs the media campaigns, the social media campaigns, et cetera. FUNK was, as you might remember, the first product in Germany with an unlimited daily data and a tariff plan which you could pay on a daily basis and pause within the month at a certain limit.
Based on this new architecture, we have implemented FLEX. FLEX is back again to the typical and very well-established monthly contracts. People can cancel it every other month. We offer it as a difference to FUNK on the Vodafone premium network in three versions, 5GB, 10GB, and 15 GB. We have listed here the conversion, 50% is the 5GB plan, 30% is the 10 GB, and 20% goes up to the high volume 15 GB. We have on top of the social media campaigning, and the word-of-mouth activities, we have done a combined TV campaign for freenet TV and freenet FLEX to test this. We have learned that the combination is difficult to understand, and the impact of this specifically on FLEX is not a very high one.
I think it's still an important step that we reunite majority of our products under the freenet brand, and we will continue to do so. As I said in the beginning, and we have not trying to hide this, also in our corporate news, the freenet TV, page number 10, freenet TV RGUs are going down. Those of you that have joined the half-year call will remember that we have predicted this. This is going down. On the one hand, there is an effect, this amounts a total of - 14,000. This is the former satellite customers which run out of service. There is still another around 50,000 of the pure terrestrial customers that have gone away. We have called all these customers, or the majority of these customers, or sent them an email, to learn what is the reason why.
We have learned that the bigger part of it came out of the voucher customers. These people said, "Well, I've had the voucher, but the majority of our hours in front of the TV is not on the private channels, not on the extra services that you provide." I think there is things like RTL not continuing to show the Formula One, and no specific events, and so on and so forth. People say, "Well, it's not worth paying EUR 7 for the minimal hours that I watch the private TV." I would argue that it's not about the price as such, it's about the benefit and the price value situation that lead to this. We think that, and by the end of October, it shows the direction that we will, at the turn of the year, go somewhere in the range of 900,000.
Well, when we decided for the price increase, we have a 20% price increase. We have expected a churn of 5%-6%. Meanwhile, it looks more that it's going to be 10%, but on the equation, you will easily do the math that it's still a profitable and accretive move with the price increase. It also shows and demonstrates to us that we might do another one anywhere next year or the year after. Going to next page on waipu.tv. As I said, there's only 1% gain of new customer net adds in the third quarter. I think I was positive that we have even created some net adds. This was highly expected if I look at the recent numbers that I have seen this morning on the third quarter.
We are very much going towards the 550, and I'm sure that by the end of the year, we will be able to report these numbers to you. There is some nice topics which I've explained to you before and mentioned. In waipu, we are trying to raise prices. Perfect Plus is going up. We typically add a couple of new features or a couple of new channels in parallel with price increases. We also have now to experience what the price elasticity and the price sensitivity of our customers are. Once again, we are positive, and we have once again done the same logic. We have raised the prices and incorporated into our business simulation, a certain level of churn. Still, as I said, we are expecting a 550 by the end of the year. What is the outlook for the fourth quarter?
We're middle of the fourth quarter. We don't see significant changes in the market, no real price pressure. By the way, we will start our own 5G offerings early in 2021. If we look at the market, there is a very slow adoption of 5G. The iPhone 12 is not bought for 5G, but because it's iPhone 12. The demand on a private consumer level is super low, not to say nonexistent. I think different from the big networks that provide their services also to big corporations, that have internal usage for 5G. It is not an end consumer product as such. In our research, also show that the majority of consumers do not understand the difference anyway. We still expect further net add growth in the subscriber base. Gravis has started their Christmas business already early October.
Apple margins are not tremendously high, but we see that there is no downturn from the second light shutdown in Germany so far. On TV and media, I will not repeat the numbers. On a group level, we confirm the guidance and the completion of the Sunrise transaction is now becoming real. Having said that, I'd like to hand over to Ingo Arnold to go through the financial part of the presentation.
Thank you, Christoph. Good morning, everybody also from my side. I start on page 13, with the overview of the group financials. I'm very happy that we have such a strong EBITDA development in the first nine month of the year. The revenue was relatively stable. The gross profit slightly down, all in, only 1.1% decrease. The EBITDA was 3.7% up, and this in a year where we had the crisis. I think, again, we showed that we are very resilient to such a crisis and that our business model is very strong. Moving to the mobile segment on page 14. Here, definitely what you can see is that there is no impact visible from COVID-19 and from the situation here. The revenue is very stable compared to last year. The gross profit is down by something like EUR 13 million in the first month period.
I think we already explained all the reasons to you in the last call. I think the main reason was in the first quarter that there was an extraordinary hardware bonus in Q1 2019, which was something like EUR 6 million. Then we had some effects in the second and the third quarter, from roaming, from lower usage and also from the regulatory effect from the mobile number portability, what we saw there. I think what we also showed is that with a lot of efficiency measures, most of them are recurring. With implementing these measures, it was possible to overcompensate the loss in the gross profit and to show a very positive EBITDA development here in the mobile business. This is based on the figures on page 15. Christoph already talked you through the increase of the post-paid customer base.
This year we gained something like 102,000 customers already, and this is much better in comparison to 2019. I think we have a good base here also for 2021 to increase the service revenues on this base. Because what you can also see is that the ARPU is stabilizing again. I think there were some roaming effects which are not profit relevant for us. There were these roaming effects, especially during the travel season, the travel activities were much lower because of COVID-19. We see that the effect in the third quarter was even smaller. All in, I would say we are on a stable ARPU level. Digital Lifestyle revenues slightly up as expected at the beginning of the year. Moving to the media segment.
I think what we see here and what is important, we have had a lot of discussions about it in the past, is that when you were criticizing that the contribution to the group EBITDA would be too small. I think what we see now is that we already have in the first three quarters, we generated an EBITDA of EUR 64 million. If you put this into connection to what we received during the whole year, you see that it's getting more and more important here for us as a group. Moving to page 17, you see that mainly EXARING is contributing to the increase in the gross profit and in the EBITDA of the TV and media segment. This is based on the growing number of subscribers, for sure.
I think we are happy that since May, we only see positive EBITDA contributions month by month from EXARING. Therefore, I think we already forecasted it. What we do expect for next year is definitely a positive all year result from EXARING. Looking into the figures of Media Broadcast, you see that, yes, we saw the RGU slightly decreasing during the last quarter, but we do also see on the back of the price increase, that it was possible to increase our EBITDA and our gross profit further. It is a very successful story here on the B2C business. In the B2B business, the optimization comes together with the start of the digital radio, the next multiplex, which could be started at the beginning of October, but also in the third quarter, we were more successful with our digital radio here.
Moving to the free cash flow. I do not want to be too optimistic here because we see EUR 220 million here already at the end of September. I think this is near to what we guided up to the end of the year. We have some phasing effects here in the working capital. Definitely up to the end of the year, we will not stay only with EUR 22 million net working capital change here. There will be some negative effect in the fourth quarter. We still expect some tax payments, but this is based on the authorities, so I'm not sure what will happen, but I expect further payments for the fourth quarter. CapEx, I think we had a third quarter where we invested something like EUR 15 million.
I think something comparable can be expected also for the fourth quarter. We have still to invest into the digital radio business here. Therefore the CapEx levels in the third and fourth quarter were higher than in the first two quarters here. On the leasing side, I think no surprises. Interest payments slightly lower. The interest rates in our loans are getting a little bit lower, especially with the lower leverage. I think this is the perfect bridge to page 19, where we see some other main financial KPIs. On the one hand, the equity ratio is now at nearly 230%. Also from this side, you can see that our balance sheet is much more healthy than it was before. Also, if you look into the leverage, we now do have a leverage of 4.3, which is much better than last year.
What we also see is, putting into consideration the values of Sunrise and of CECONOMY, we do only have an adjusted net debt of 1.4x. If you, in addition, put into consideration of 1.0x of this leverage is linked to leasing contracts, you see that we do have a, let me call it a bank leverage or bank financing leverage, which is only something like 0.4x. I think a very healthy balance sheet, what we see now. Yes, there will be a move when the transaction in Switzerland takes place, hopefully in November. I think there are good signs that it could work very fast. It would not only be an adjusted net debt and adjusted leverage, which is so low, but then it will also be the normal leverage, which moves down. Coming to our guidance on page 20.
Yes, we already discussed that in the freenet TV RGU, we had to change our guidance here, from a stable view to a significant decrease. When we published our guidance, it was not clear that we do the price increase, and it was not clear how it would work and what the churn would look like afterwards. Now we have a better view on it, and therefore we had to change it, but without any impact on the financial guidance. We still expect a stable revenue without Motion TM. We expect an EBITDA between EUR 415 million and EUR 435 million.
We are very confident with the free cash flow guidance, which is EUR 235 million-EUR 255 million. This is it from the financial side. I think all in very good figures. Now I do open the floor for your questions.
The first question received is from Polo Tang of UBS. Your line is now open, sir. Please go ahead.
Morning, everybody. Just have two questions. The first question is really just, can you clarify what's happening with your churn in terms of your post-paid mobile base going into Q4? Has it started to move hard and normalize after the low levels that you saw in Q3? Can you clarify what is happening with your shops? Do they all remain open during the new lockdown or are some of them closing? That's the first question. The second question is really just a bigger picture question on the German mobile market, which is: What's your view on what will happen with the fourth mobile network build in Germany? If it does go ahead, would you be willing to distribute and resell 1&1 contracts? Thanks.
Yeah, thanks for this. On realized churn, we continuously see that churn intake compared to previous year is lower. This is started in March and is continuing. We do not expect this to change to the old version. Once again, that is compared to previous year. If we take a view on free-to-churn potential, we also see that compared to previous years, it's going down as a result of a couple of measures as well as, I would say, a certain fatigue on changing the tariff plans and optimizing themselves. People do have LTE tariffs. They have a data package which is suitable to them. We see that continuing, which at the same time means that the ratio of renewals and gross adds, the balance is more going towards the renewal. No change to this. Second question or second part of this question.
As of today, all our shops are open. That is the case for mobilcom-debitel shops, as well as Gravis, also our biggest partner, Media-Saturn. So far, the German government continues to claim that retail will not be shut down during the next couple of weeks. There's no reason to disbelieve. I think that's working. At the same time, we see that the footfall came down in any of the channels. The number of tickets that we do at the cashier is the same. Obviously people are not going out to do shopping as an entertainment and now and then do some spontaneous buy. Those one that have a reason and the purpose to walk, you can generate about the same number of revenues and tickets. So far, we do not expect an impact on transactional level and on revenue level.
On the United Internet, well, obviously, they are getting under time pressure to provide their services. They're also getting under time pressure to find a proper agreement with Telefónica. We are not really participating in any of this, but we are based on our old long-term relationship with United Internet as an ISP. We have spoken to them. They have reminded us that anyway, any of the holders of frequency needs to give access to us, and we would certainly consider reselling their products. I think that is still rather far away.
Thanks.
The next question we received is from Christian Fangmann of HSBC. Your line is now open, sir. Please go ahead.
Yeah, good morning. It's Christian. I have three questions. First one is on the very strong Q3 net adds. My question is, how do you see the value mix within that one developing? Is there any color you can share with respect to, is more coming from the Vodafone network, from the DT network? How are consumers purchasing these days? Is the strong momentum that you have seen in Q3 kind of also staying in place in early Q4? What are you seeing in terms of the mobile net adds? My second question is on free cash flow. Your guidance is EUR 235 million-EUR 255 million. You've seen year-to-date very strong and much better-than-expected free cash flow development.
Is it fair to assume, you mentioned some remarks with respect to working capital and so on in the fourth quarter, cash taxes potentially going up, but is it fair to assume you will be towards the mid to high end of that guidance range for the full year? My last question would be on the outlook for 2021 with respect to the lower commercial spend and cost that you've seen throughout this year, and you said some of that is structurally still to remain. Maybe can you share a bit of light on what you're expecting in terms of commercial spend and the underlying spend, which could also positively impact 2021 in terms of the cost base? Thanks. Christoph.
Thank you, Christian, for this question. If you look at the detailed numbers, the fact that some of the net adds is coming out of freenet FLEX and FUNK. This freenet FLEX only started, this is a Vodafone. Vodafone is the strongest partner at this very moment. We will also start the 5G with Vodafone. I think they gain internal share, as a result of a very close interaction, cooperation, and the high willingness of them. They see that we basically broaden and widen their sales platform. I think Deutsche Telekom is a bit more distinctive in working with us at this very moment. That may change again. Yes, we are gaining a bit more in Vodafone. They become more important.
On the other hand, we have gained a couple of thousands more than we did before when we signed a closer, non-exclusive, but a closer midterm agreement with Check24, which is a price comparison machine on the internet. I think, if we look at the value mix, while on the one hand, we have the premium network, Vodafone, where we can attack with FLEX and so on and so forth. Since you seem only on a reasonable price level, but not premium, and at the same time, some of these gains on the broader level come from Check24. I would say it's maybe stable or a slight go down in the ARPU, which we will not see as 50,000 out of 7 million or 8 million is not making a big difference.
If I look at the deeper numbers on the second and third digit level, I would say ARPU of these new customers is somewhat down compared to the base. On a value contribution level, we still remain to see that we only acquire customers with a positive life cycle within at least the first round of their contract, and we are even more careful on those ones that can cancel their contracts. I think value-wise, LC, lifetime contribution-wise, we're okay. We stay on the same level, but they're a bit lower on ARPU. If I may. Ingo, you will certainly continue on this. On the cost base, I think it's hard to say what's going to happen in 2021. We are certainly trying to freeze any of SG& A marketing, et cetera. Where we were very efficient this year.
At the same time, nobody knows then when the market is opening again, what will be the tactical moves of our competitors, and certainly we prepare to react. There's one element out of the market, or completely disappeared, which helped in the previous year, and also at the start of this year, at least. On the hardware side, you basically are confronted with the duopoly of Apple and Samsung. The five years attacker, Huawei, who created a bigger competition on Android, driving Samsung, being open for marketing funds, driving Huawei to really ambitiously gain market share. That's a momentum which I don't see any replacement of this for 2021. That, at a certain level, may cause that we have to invest a bit more.
If we look at gross margin, I think there will still be some pressure coming from that end because the hardware industry is not contributing to a growth in the market.
Yeah.
Maybe I can add from my side. Good morning, Christian. I think, yes, it is definitely our ambition to make some of these efficiencies, what we saw during the year, to make them recurring. It is a little bit early to quantify it now because we all know that the world will look a little bit different, hopefully, that we can say after the virus then. Therefore, it's difficult to quantify it, but it is our ambition. On the other hand, coming to your third question, I think it was not really a surprise. I already prepared the answer during my presentation, as you also mentioned. I think, yes, it looks difficult not to meet the guidance range. This looks difficult if you do only have EUR 220 million. As I tried to figure out, we still have some open ends.
Therefore, I do not want to narrow the range in this call now. I'm definitely sure that we will land between EUR 235 million and EUR 255 million.
Okay. Thank you.
The next question received is from Yemi Falana of Goldman Sachs. Your line is now open. Please go ahead.
Good morning, everyone. Thanks for taking my question, and congratulations on the quarter. Just one from me on use of proceeds. Could you remind us on your priorities as you receive the Sunrise cash in? Is there an expectation that you regear the group? Also, is fixed wholesale an attractive prospect in your mind? Do you see any attractive M&A opportunities, or is there potentially upside to shareholder return? Any color on that would be great.
Maybe I start. I think we already discussed it during our last call. I think we definitely have to repay EUR 800 million of debt. There is an amount of EUR 300 million where we have not yet decided how we will use it. Definitely we would like to do something in the interest of the shareholders. This could be that we, I think we have these share buybacks out up to the end of the year. The program is running now. I think this is an opportunity I think we have to discuss internally. On the other hand, I think the net debt is already relatively low. Maybe a short reduction could be reasonable. I think we have not yet decided.
Definitely I think on the M&A side, with the opportunities, we do not have a long list at the moment what we could do, and definitely we do not have one item on the list which could be as big as the EUR 300 million are. I think at the end of the day, I do expect something like a mix, how we will use the EUR 300 million. Definitely we stand to what we told everybody before that when we will create or generate a gain out of the investment of Sunrise, we will let the shareholders participate in it.
Let me add a little bit of color on M&A. If I look at it, what fields would we look into? Well, telco in Germany, there is not much to buy. Media, anything around content, we think that telcos are not good, no experts in content development or content generation, so we should limit ourselves. Then we could look into something like IoT. Well, it's a very fragmented market with some big bets. Once again, we think that we are strong on the distribution and on the sales side, but not on the production side. Then the third one, the fourth learning is that if you find profitable companies at a reasonable size, well, then the prices are high up. The fifth point is that we certainly want to focus on Germany.
If we look at these three or four things as a filter, then the optional space is rather limited. Things that we are investigating on is e.g. on the new multiplex. We have just founded with our partner, Oschmann Media Group , a company to sell ad space. We have also thought about joining them with two or more, three or more channels. I think we have some more room to move there. It's not CapEx investment, it's not M&A, but it's maybe a bit more investment into extending our value creation in this field. I think that it, as Ingo described, there is maybe a long list of ideas, but there is not a long list or short list of targets.
That's really clear. Thank you.
The next question is from Joshua Mills of Exane. Your line is now open. Please go ahead.
Hi there. Thank you very much. Detail you've given us on slide seven and eight, which is very helpful. My question is, how has this share of online, offline, and also captive versus non-captive trended over the last year or two years? Just to try and get a sense of, particularly on the captive side, is this kind of a stable split, or is it one that's been changing one way or the other? Just so I understand, the point you're making here, I believe on slide seven, is that online profitability may be lower given the competition with your competitors, but it's still an important sales channel given the kind of flexibility. Is that the right read of this or not? Would be great to hear. The second question, just on the EBITDA beat this quarter.
You call out in the press release that overhead costs were down about EUR 6 million this year in the quarter. Could you give us a kind of rough estimate of how much of that is due to things like COVID-19 and how much is underlying cost-cutting, just to get a sense of what we should expect the run rate of that cost and therefore the run rate of the EBITDA to be for next year? Thank you.
Thanks, Joshua. The captive as well as the non-retail, both have grown over the years. I think we've never been very transparent. It was always stronger direct than everybody thought. Yes, it has grown, and I think it will continue to grow, but at this level, we are not talking about big chunks. It's like 0.5%, 1% maybe, or maybe 2% or 3% maximum per year. It's the ambition in the captive to do even more, except for our main partner, Media-Saturn. We are always very happy when they are strong, and they do a great job. I think in many of their assortments, they are even a winner coming from the crisis. Yes, we want to continue to do so. I think you did the proper reading.
I think a balance of these two, the multi-channel balance is a strength because we know how online can become a very tough channel overnight if one or the other player opens his wallet. I think your reading is perfectly fine.
I think to answer the other question, Josh, it's a little bit difficult, to be quite frank here, because what cost-cutting is clearly linked to COVID-19. It is easy to say where we had short-term work and where we got some money from the government. It's something like EUR 3 million. This is definitely linked to COVID-19. For example, if I do save some marketing expenses, wouldn't it be possible to do it without COVID-19? Is it only possible because of it? This is a little bit difficult. I think, and this is what we tried to explain earlier, we look into all of these things and we look into it and make it hard for the next year.
We are just in the process of doing our budgeting, and I think at the end of this process, we have a much better view what of it will be recurring and what will be non-recurring. It's difficult to say today. I think definitely there is a COVID-19 effect, but it's too difficult to quantify.
Thanks. It's really clear. Thank you.
The next question we received is from Ulrich Rathe of Jefferies. Your line is now open. Please go ahead.
Thanks very much. I have four, I think, very short questions. The first one is on the very strong EBITDA in the quarter, could you confirm that there were no sort of very clear one-offs like provision reversals or anything of that sort in there? The second question is, on this online/offline comments that you made that were quite interesting, already been debated so far, could you comment whether there is a notable difference in age profiles? In other words, whether that mix shift essentially just is an aging thing, and that obviously then influences your view on the long-term future. I would just like to touch on that aspect of it. My third question is, the share buyback that you mentioned, the EUR 100 million, that is progressing very slowly according to the releases you've put out.
It sounds like you won't be able to make EUR 100 million with the sort of rate at which you buy. What is holding you back? Is that just liquidity? If it is liquidity, could you comment to what extent that informs your views on how to return cash to shareholders? If the liquidity is low, is it the right thing to sort of look at share buyback at this point? My last question, if I may. The freenet TV, you're sort of making a comment that the churn is higher but still accretive, it's accretive, essentially 5% less to revenues than you thought it would be when you planned the move. That must be a net hit to your earlier business plan. Where have you absorbed this in the full year guidance?
Is this a stronger bit coming out of TV media elsewhere, or is that the mobile business, or is it just the room that you had in the guidance in the first place? Thank you.
Yeah. Well, thanks. On the freenet TV, we have to be realistic. The price change was in May and July, so we have only half year effects. Anyway, these vouchers that now run out and create churn were still vouchers paid a year earlier. The immediate impact this year is not that big, I'd say. Ingo will give more details on the share buyback. Also, Ingo will give some comments.
I can just say, the best thing is that the volume is low, and certainly for the shareholders, the share price is low, but for the program, the low share price is certainly something which helps us, and also our biggest shareholder is still telling us that he thinks it's the right move, and we go the right direction. I think we spent so far about EUR 28 million, EUR 29 million, and it will be hard to spend EUR 100 million, but we still believe that on this share price level, it is the right measurement. On the on/offline, well, yes, it would be an easy answer to say that shows you that these are the young ones, these are the old ones. No, it's not. A major driver is SIM-only versus subsidized combination with hardware. That's one driver. It's different a little bit from where people live.
Traditionally, our shops work really well and are in smaller cities, and I would even say kind of central of rural areas. These kind of people, whether they are old or young, still are more traditional, and they remain to be traditional. I think in mid-term, I believe, and once again, I mentioned Media-Saturn, where we are shareholder, and we are in very deep discussions about how retail overall will work out. We see that the shopping centers suffer most from the Corona situation. The shopping centers also suffer because their social demographics is widespread age-wise, but spending power is rather low. We do not hold the shops, only a very few ones on the real expensive high street, where the mix tends to be younger than in small counties.
Overall, my projection would be for the next three to five years, that this will remain the same. Retail is a strong element. I think mid-term, it's more of a mix. People might come into the shop, buy, and then combine it on the website and do additions. For three years now, we have the possibility for the consumers to set a date or to ask for a meeting at a set date in the shops. This is not only used by those that have bought in the shop, but also by the online users when they need some help, et cetera. I think we need to transform the shops into a meeting place, into a place where we can do service, where we can do a help desk, et cetera.
By having it, we create interaction and relationship between the customers and our shop representatives, and then they will take these upsells and cross sells. I think it's not so much a matter of demographics, but of the proposition of the shop.
From my side, Ulrich, good morning. I'm not 100% sure if you've got your first question correct, but if I got it correct, I just would like to confirm that there are no extraordinaries in the results. It is ordinary course of business, what we see here. To your second question, the share buyback. Yes, I think we are also a little bit disappointed that it could not go faster, but I think there's a regulation out. You are not allowed to buy as fast as you want. It is all based on the daily volumes, what you see. Therefore, what we do is we just do it in the framework of the rules, and we do as much as what is possible inside these rules. We do not stop it, or we do not reduce the daily volumes.
We ask our bank to buy whatever is allowed to do. I think we have 1/3 of the volume now. Yes, if it goes in this speed, it will be difficult to do the whole program up to the end of the year. Maybe the volumes will increase, and then it could go much faster. Your last question concerning freenet TV. Yes, we see small impacts on the gross profit side, where we are a little bit lower in comparison to what we budgeted. On the other side, the marketing spendings are much lower than we expected. It is overcompensating the effect that the churn is a little bit higher than we basically expected at the beginning.
Thanks very much. Thanks for bearing with me on that many questions. Thank you.
The next question received is from Steve Malcolm of Redburn. Your line is now open, sir. Please go ahead.
Thank you, guys. Thanks for taking the questions. Three, if I can. First of all, thanks very much for slide seven and eight. They're really helpful, interesting. I just want to go back to those and refer to the comments you made on the sort of the retail, non-retail mix. Given that, given the shift, given what's happening in COVID, is that making you think more fundamentally about the number of stores that you run? Does it make you think you should have less of those going forward as the mix moves away from retail? That's question one. Question two is, can you just define exactly what a captive channel is? I assume that's kind of MediaMarktSaturn, the mobilcom-debitel stores, and any online transactions that come through your direct website.
Could you confirm that? Just going back to TV, with the benefit of hindsight, do you think you got that pricing decision wrong? Looking forward, should we expect that business to suffer quite a lot of margin squeeze if you can't take price? Where I assume your content costs are probably rising, and when you try and take price, it appears that the consumers are pretty resistant to it and want to leave. I'm trying to understand why you don't see sort of growing margin pressure in that TV business going forward. Thanks a lot.
Yeah, thank you. Well, the first thing on the stores, no, I don't think that we will bring stores down the number. I do not see a need. If local or regional shutdowns will continue or remain an element for the entire society, I think our approach is more bringing the cost per store down. How can you do that? Well, first of all, you can talk to the landlord because also the landlords know that the demand is going down. They are, compared to a couple of years ago, they're quite flexible. Second thing is, we are trying to optimize opening hours. Yeah. For almost all the shops, we do measurements on footfall, and we are learning now that Well, traditionally our shops open nine or 10 o'clock and are open till eight o'clock in the evening.
We have a reasonable number of shops yet, where we limit these. We have 12 of shops where we test now that we only really open them in the afternoon for four to five hours, and the rest of the day we only do meetings, which are pre-planned. Our guys in the shop do interact with the customers via by phone, WhatsApp calls, video call chats, et cetera. It's easy to imagine that, I would say the typical shop cost today is, and this is averaging across the entire shop chain, about 1/3 is lease and maintenance, about 2/3 is personnel. If we go into shorter cycles, into a lower number of sales reps at the same time, well, we work on 60% or 65% of our cost base, and at the same time we talk to the landlords.
I think currently my team in the shop, in the retail unit, is more working on how can we keep the sales at the existing level or even increase it, but how can we optimize the cost side without impacting consumer perception. Captive is any channel where we do not have a third-party intermediate. That's our own website, that's our own apps and customer service. This is our active campaigning on the telephone. Non-captive is MediaMarktSaturn, it's third-party retailers. It's even third-party online shops that only get a commission, and we are not in control of what they actually do. The characteristic of a captive channel is that we define the offer, we define the prices, we define how and when things are done. We are in full control, and we design and optimize customer journey.
In MediaMarktSaturn, it's our people and it's our promoters, but still MediaMarktSaturn, they do the advertising, they do the specific local or national campaigns. The third thing on the content cost, no, we don't experience an increase or a pressure on content cost. We have long, and this is like three to five-year deals with all the major content providers. These are set deals at set prices. Any price increase we do goes to, not 100%, but to the majority. Big majority of the increase remains with us. There is a couple of content costs which are variable, and there's also a couple of other third-party costs, like technology, et cetera, which is slightly variable. Price increases tend to go straight into our pocket and deliver more than 80% gross margin.
Grow the margins in the TV business going forward?
I think it's stable margins. Increasing margins if you take price increases in consideration. Content costs are not increasing. We haven't seen that.
Do you think this year's price rise was just too much with hindsight? Can you get away with smaller ones going forward?
Well, you do not do price increases without testing, and the testing showed it makes no difference whether we increase it by 5%, 10%, or 20%. Certainly you go for the biggest one because you will prefer one significant step instead of constantly repeating. The German rules, the legal environment tells us that we need to send the customer a letter or an email saying, and the header must be "Price increase." You must inform them that this price increase allows them to immediately cancel the contract. You don't want to do this every other month. You want to do that, if you do it once, then you do it in a significant way. On waipu, for example, we do a 25%, but we say that if you're an existing customer, you get more content and you get a discount on the price increase.
We're doing all these kind of mechanisms in order to avoid the visibility within the possible legal framework.
Okay, that's very helpful. Thank you.
Thank you.
The last question for today is from Wolfgang Specht of Bankhaus Lampe. Your line is now open, sir. Please go ahead.
Yes. Hello, good morning. Two follow-ups from my side. You sold during the quarter freenet digital GmbH. Is there anything of that that ended in the Q3 reporting, or can we expect something for Q4? The second one, you probably already had some prelim talks with the mobile operators. Can you already share some indications how your purchase conditions for 2021 should look like?
Hi, Wolfgang. I would like to start with the freenet digital question. It's with a small sale here, therefore, I think we did no big reporting about it, and also in our financial figures, it will not have any big impact here. Not for the future and not for this year. No, there's nothing to expect for the fourth quarter.
I think the proceeds were only paid in shares, and we're still having these shares. On the conditions, we are not reviewing the conditions on a tariff level on either monthly, quarterly, or yearly basis. If we implement, let's say, FUNK or FLEX, we have a purchase agreement with Vodafone, and this is not limited for the year, but it's limited for the tariff plan. I do not expect any significant changes. The bigger part is the one where we talk about annual bonuses, et cetera. All the indications that we see so far is that we will continue to be on the same level, I'd say. Short answer is we do not expect any relevant changes.
Okay. Thank you.
As there are no further questions, I hand back to the speakers for closing remarks.
Yeah. Thanks everybody for participating and listening and contributing with your questions. Thanks also for the feedback on the management presentation. We wish you all the best. Stay healthy. See you soon.
Bye-bye.