Morning, and welcome to Elisa's Second Quarter twenty nineteen Analyst Meeting and Conference Call. I'm Vesa Sahebert, Head of Investor Relations and here together with me is a very familiar team, CEO, Veli Matyi Mattila and CFO, Yari Kinone. We have also some audience and some of my colleagues here. Welcome. We start this meeting with a presentation followed by Q and A and first we take questions from the audience and then from the conference call lines.
Velimaty will go through the Q2 report and Yari will focus more on financials. And now we are ready to start, so I give the word to Velimaty, please.
Thank you, Wesa, and welcome on my behalf as well to our second quarter report. And just let's get started. First, the second quarter was another good quarter. Our execution was going according to our plan. Our revenue was slightly down.
We saw growth in comparable EBITDA. Mobile service revenue growth came to 1.9%. We also had postpaid voice churn slightly down from 19.7% to 18%. Postpaid mobile subscriptions growth was up to 27,000, and we had sourced fixed broadband subscription amounts base go down 5,100. We made Polystar acquisition and completed it during the quarter.
And we have also started the sale of five gs services with new phones, first phones and subscriptions in commercial use. The revenue came down mainly due to the fact of that the equipment sales came down slightly. Also interconnection prices have decreased in Finland. And also we had still some divestment impacts to the revenues. In Mobile Service revenues, the four gs speed upselling continues very nicely.
We also have sold our first five gs subscriptions. We have made some product changes. But we have also seen, as we have earlier communicated, the impact now from the earlier price decreases in some large corporate customer cases and also from some public sector customer cases. EBITDA was slightly up. And of course, we got some benefit from IFRS 16.
But regardless of that, we saw year on year comparable EBITDA growth somewhat. And of course, our productivity improvements, as earlier said, have
worked.
In terms of the churn, the churn came down. As we earlier communicated, we had slightly higher growth in slightly higher churn in first quarter coming from the corporate sector. But as we communicated those, that time, we our competitiveness is strong and the churn came slightly down. In regarding to the ARPU, even if we had some growth in the postpaid subscription side, the ARPU came down mainly due to the lower interconnection prices, also based on the fact that in some of the larger corporate B2B side, these lower prices earlier indicated they now came more into effect. When we look at the segments in the Consumer side, revenue came down 1% and EBITDA was growing 3% year on year.
In the Corporate segment side, revenue was coming also down with 1% and EBITDA was growing 6% year on year. Pretty much the same reasons in both segments for the revenue impacts as well as to the growth in profitability. We continue to execute our strategy with three focus areas. And if we think about the mobile data selling, the growth in smartphone four gs smartphone penetration is increasing. We still have growth there, now having 84% of all the smartphones all the phones being smartphones and pretty much of those four gs phones.
And the four gs penetration in in subscriptions is now 70% and the lowest speed level 50 megabit per second penetration in our subscription base is now 33%, which indicates that after getting customers to the lowest speed level of five gs, we are getting more and more customers to the higher speed levels in four gs and also now starting to have gradually some of the early first movers to five gs speeds. So there's a very good business model, what we have done on the past couple of years in four gs to sell speed and upsell customers to higher speed levels, it is very suitable to five gs as well even if we believe that in the five gs era, we will have other business models as well to benefit our revenue, mobile service revenue growth. Moving on to five gs. We have, as said, started first the presales of Huawei OnePlus HTC and JetTE devices. We have started the sales, real sales of five gs mobile broadband subscriptions.
We have two different speed tiers. We have 600 megabit per second with the price of €35 per month and one gigabit per second with a price of €45 per month. And the first five gs phones have been sold also and delivered to customers, and they are in commercial use. We have the widest five gs coverage now in Nordic countries in the city of Turku. We have also coverage in three other cities in Helsinki, Tampere and Juvascula.
Of course, early on, these coverages are still limited to the city centers, but that's the but the coverage will be expanding based on the demand we start to see. And of course, that is very much going hand in hand in the increasing device offering that we'll be expanding also later this year and more next year and the following year with more and more affordable smartphones, but also with other devices like the different devices for IoT cases. We're also actively enabling five gs for new services and innovations to make take place in the Finnish and Estonian markets. Later on, we have start ups developing five gs services with our co creation challenge, and the winners will be announced in the Slush in November Slush event in November. We have also made five gs broadcast TV broadcast, four ks TV broadcast first in Finland.
And of course, the IoT is very lucrative area. And there we have cooperation with more than 100 B2B customers and more to come. So the subscription and device sales has started, commercial use, early lower volume sales, of course, at the moment, but the first movers are now using five gs in Finland and the application area is also enlarging and developing. In our Digital Service business, the original content is moving well ahead in Elisa Vite, our Arctic Circle original series has now been sold to more than 20 countries. For example, GDF will be broadcasting that in Germany.
Also, All the Since original series this spring was one of the successes and continued successes of Elizabethes original series production and co production with others. We also are involved with eSports and the engagement is expanding. For example, we had for one game, we had more than almost 5,000,000 viewers in Twitch in May just alone. In the International Digital Service businesses, we completed, as said, the Polystar acquisition, a Swedish analytics assurance software company. As earlier also indicated, we want to speed up the automation, also potentially our Smart Factory management businesses with acquisitions, and this was one that we now completed.
Also our Elisa Smart Factory management business continues to move ahead very nicely having a larger and larger customer base internationally and also some new solutions in the offering have been released. And finally, about the outlook and guidance. Unfortunately, the positive development of the macroeconomic environment in Finland seems to be decelerating. We have competition still remaining keen in the Finnish market. And we reiterate our guidance that our revenue will be same level or slightly higher than in 2018.
Comparable EBITDA will be same level or slightly higher than 2018. And our capital expenditures will be maximum 12% of revenues. And then I turn the word to Jarik, please.
Thank you. Let's start with profit and loss. As mentioned by Velimati, Q2 was, again, good quarter and in line with our expectations and guidance. Revenue change was minus 1.3% or €6,000,000 mainly coming negative impact coming from interconnection price decreases. So interconnection and roaming decreased by €4,000,000 Another negative impact from equipment sales, minus €4,000,000 Net impact from divestments and acquisitions in Q2 was EUR 2,000,000.
That includes Polestar one month consolidation and divestments done last year. And excluding those items in both segments, service revenues in corporate customers was slightly negative €2,000,000 and Consumer segment positive €2,000,000 In both segments, traditional fixed line services continuing in decreasing trend growth in both segments in domestic digital services and in consumer segment mobile services. In consumer segment, the mobile services were in Q2 slightly negative. In earnings development, EBITDA was excluding one offs was increasing 7,000,000 or 4.4%. And in reported EBITDA, we had EUR 5,000,000 one offs.
Out of that, 4,000,000 relates to personnel reductions costs and EUR 1,000,000 relates to Polestar acquisition transaction costs. This EUR 7,000,000 change in comparable EBITDA. Out of that, 4,200,000.0 is coming from IFRS 16 change. Polestar impact is approximately 400,000. So we have continued with productivity improvement measures as we communicated earlier, we'll continue with those.
And they will contribute more in the second half as we have said earlier. EBITDA margin, comparable EBITDA margin increased clearly to 36.2%. And even excluding IFRS 16 change, it was 35.4, so clearly up from last year. EBIT comparable EBIT was slightly down from last year. Depreciation increased €7,500,000 Out of that, 4,500,000.0 comes from IFRS 16 change.
Approximately €500,000 relates to license five gs license that was acquired end of last year and depreciations from that. Also, we had in Q2 €1,000,000 one off type of write down in in depreciations relating to assets that are not used anymore. EPS was €0.47 comparable EPS, euros $0.04 7, same as last year. Then if you look Estonia performance, which continued to be positive, revenue increased by 1.2%. And EBITDA, strong improvement, 1,200,000 or 9%.
Mobile and fixed services growing. Postpaid churn, still low level, point percent and postpaid subscription base increasing 1,700. Total CapEx was EUR 61,000,000, and excluding IFRS 16 change, EUR 55,000,000, so in line with 12% revenue guidance, twothree in Consumer segment, onethree in Corporate segment and main CapEx in four gs network capacity and coverage, other network and IT investments. Investments in shares was higher, EUR 89,000,000 and of course, relates mainly to Polestar acquisitions and some other minor share purchases. Cash flow growth was strong.
Comparable cash flow growing from 87% last year to 102%, 17% growth. Net working capital change was positive In year on year comparison, CapEx was lower as well as paid taxes
lower.
IFRS 16 impacted positively €4,000,000 And half year comparable cash flow is €170,000,000 which is €30,000,000 higher than year ago or 22%. And if you look at operating cash flow conversion, still high at 66%. Then capital structure, which remain as well according or in line with targets. Net debt to EBITDA was 2x, somewhat higher against end of last year and Q1. We had dividend payments and, of course, Polestar acquisition impacting somewhat IFRS 16 impact to net debt as well as assets is 70,000,000 end of Q2.
And going forward, we see that net debt to EBITDA goes and reduces down as cash flow generates in the second half. Return ratios at good level. Return on equity was 28% and return on investments 17.1%. We completed a month ago Polestar acquisition. Polestar offers and provides software solutions to network management and network operations to mobile operators and is very complementary to our own Elisa Automate service offering and an interesting offers an interesting opportunity to accelerate growth.
Polestar headquarters in Stockholm, subsidiaries in North America, Australia, Singapore and Russia. Approximately 200 employees and more than 100 customers in 50 countries. Acquisition price enterprise value was EUR 70,000,000, additional EUR 5,000,000 maximum EUR 5,000,000 acquisition price if growth targets are achieved. Polestar last financial year ending April revenue was EUR 38,000,000, EBIT EUR 6,400,000.0. And we started consolidation now June 1 and impact in Q2 figures revenue €3,000,000 and as I said, EBITDA 400,000 And this acquisition is EPS positive from day one and no impact on midterm targets nor dividend payment capabilities.
And now I give word to Wesa, please.
Thank you, Jarij. Now we move on to Q and A part, and we start from the audience. First question comes here, Matti.
Hi, it's Matti Rikone Carnegie. A couple of questions. First, about mobile service revenue. I think you mentioned in Q1 that you would expect mobile service revenue to start accelerating as of Q2, and that was not the case. So do you still think that there's potential to mobile service revenue to accelerate in the second half?
Second question is that related to the restructuring costs, which you book as extraordinary. I think in earlier years, you had a habit of making a lot of cost reductions, but you did not show that many one off restructuring costs. So I'm wondering what is the reason to book them as extra now? And do you still expect that there would be additional one off costs in the second half related to the cost savings?
All
right. In regards to the MSR, I don't know where you have heard about us saying that MSR is accelerating. What we have been trying to communicate at least is that we don't give guidance for MSR, but we see that the MSR will have a positive sign in the growth rate. But we have not taken any position for a couple of quarters what the growth rate will be because of the competitive dynamics changing in the market very heavily. But we see that with the upselling of our higher speeds to customers as well as with some product changes, we can generate some positive development on the mobile service revenue growth rate itself.
But I'm sorry if we have miscommunicated and made the wrong impression, But clearly, we have been very consistent or communicated that we don't give any guidance where the MSR will be. But we have said that it will be with a positive sign with the growth rate going forward. In terms of the restructuring cost, we have made some restructurings during the quarter, but I'll let Jarri to explain a bit more further details Yes. On
Regarding those, there's no change in accounting or booking them and treating them. We always had personnel reduction related expenses as one off expenses. And these reduction costs in Q2 as well as in Q1, they all relate to personnel reductions. And this is the way that we booked those earlier as well. No change in that.
And do you expect that they would you would still have those in the second half? Or are you mainly done with the cost savings now and the impact of those would be seen more in
The cost savings are also coming from various sources. So it's not only these reductions. So there are many productivity improvement measures ongoing and taking place. But we don't give any forecast regarding restructuring costs.
All right. Then finally, when you add Polystar into your numbers from June, don't you think that with the revenue contribution from Polystar, do you think it would be fair to guide or change your guidance so that it's the top line should be growing and it should not be possible to remain top line as flat with the Polystar included as I assume that it's part of your guidance at the moment?
Yes. We reiterated from the Polystar, we will get half a year of the revenue to our numbers. And we reiterated our guidance, which says same level or slightly higher.
Fair enough.
Okay. Next question, Sami.
Sami Zarkermes, Nordea Markets. Have a couple of questions. Firstly, on NetApp's development in Q2. You were quite successful on the mobile side. Would it be possible to get a bit more color on how you did achieve the positive net adds?
And then on the fixed side, you did lose quite a bit of broadband customers. So were there any exceptional developments in Q2? So that would be my first question.
All right. In regards to the net adds, mostly coming from the corporate side, and we have had, let's say, good success. While we have seen in the large corporate customer segment, heavier price competition starting already early last year, as we have communicated earlier, creating some more churn for first quarter this year. But also with our competitiveness, we have gained customers. As we have responded to this competition, we have been quite successful.
So for example, in the public sector, large deals, we have been winning, and we are now showing that results, which continues to be visible from these public sector deals that are rolling in still this year and maybe some of that next year as well. But those in some of these large customer deals, the price levels have been quite low as well as these public sector deals, generally, are of the lower ARPU. So that's why the ARPU impact has been negative even if we have had increase in net adds. But of course, this increased customer base is giving us very good base to sell other services that we have for portfolio from IT to other digital services to these customers. In terms of the fixed broadband side, we have some larger business B2B customers who stopped buying fixed broadband to their staff, to their homes.
So we got some kind of one off type of decrease there, which explains mostly this decrease of fixed broadband customer base. Other than that, the fixed customer base is quite stable. However, there is, of course, more and more MDU type of customer base there. So there's a slight erosion in ARPU in that fixed broadband customer base. But again, the customer base is very good and we see various different kind of other services that we can sell on top of this good customer base.
Okay. Then my second question would be on your five gs vendor selection. There's been plenty of news flow regarding Huawei that you've been ramping up in the recent years. So can you share your thoughts regarding this topic at the moment? So obviously, we have had these security concerns for some time, but then more recently also other angles to this topic.
Well, yes, this topic is quite heated and maybe overheated, there's maybe a bit mixture of trade global trade war discussion and activities, events and then cyber threat discussions. And of course, very important would be that those two different important topics are not mixed together. The trade policies and the global trade rules and discussions are one topic. There are certainly issues on a global level has to be dealt with. Cyber threats and cyber development overall is an important serious topic, and there are solutions to that.
Now we have in the discussion, there's certain maybe agendas to mix these two, which is a bit unfortunate because then we are creating wrong impressions. But to answer your question, really, are in the middle of our five gs vendor selection, so I cannot really comment on which direction we are going. I don't even know myself yet properly where we are heading, but we, of course, have very active discussions and active vendors working with us with in order to provide us good solutions to really ramp up volumes in five gs when the time comes.
And then finally, a housekeeping question regarding Polystar. Could you share the EBITDA contribution for first half of this year and then for last year as well? Thanks.
You mean Polystar's EBITDA contribution to Ellis' numbers?
I mean their first half EBITDA number and then their EBITDA for last year, if you can share those numbers.
Jari, you can maybe Yes. Answer that,
It's we gave in the notes the net impact of six months, if it had been consolidated, it's net results, 1,800,000.0. It's not EBITDA.
It's
net earnings. And it includes depreciations from the customer base. So we have allocated from the purchase price €8,000,000 €8,500,000 to customers, which is depreciated in four years' time.
Okay, thanks.
You're welcome.
All right. Next question comes here, Panu.
Panu Leitemecke from Danske Bank. I have a question on the mobile data volumes. It seems that the very strong growth is starting to level off, and Q2 was the first quarter when the data volume was actually down from the previous quarter in many years based on your figures, and the year on year growth is kind of flattening. So what are your thoughts on this? Is this positive kind of reducing the pressure to increase the network capacity?
Or is it the other way around that when the five gs is coming, the kind of demand has already saturated and there will be perhaps less need to upgrade?
Well, I believe strongly that the mobile data usage will grow. Of course, we have had strong growth in terms of the volumes. They are still increasing. But of course, since there's certain leveling off time to time in any development, start to see in mobile data. But now when we are moving to five gs gradually in the beginning now and maybe next year more and following even definitely more, it is evident that there will be volume growth.
On one hand, of course, the volume growth decrease is good for in terms of our CapEx or OpEx base, but we are not as we have never been feared for fearing the fact that customers are using plenty because then it means that customers are getting value and then they are more willing to pay more for the higher speeds. So we strongly believe that that's one very good business model to continue with five gs for customers to take more speeds with their subscriptions. There will be applications and there are already applications that where you can see clear difference when you use good four subscription versus the five gs subscription. And there are more applications like that to come in the coming months and years. So we foresee the, let's say, business model with speed based tiering to continue to be successful.
Of course, the competitive situation in the market always then has an impact. Is it very successful or successful? But we are also working on IoT side. There's additional revenue potential on the IoT side when that really gets off and maybe also some other new, let's say, performance improvements that five gs will bring you time comparing to the four gs.
Thank you.
You're welcome.
All right. The next question, Artem, please.
Artem Beleski from SEB. A couple of questions from my side. So starting with strong net intake what comes to postpaid in Finland. You mentioned about some public sector wins, which have been impacting the number in Q2, but apparently some Thursday flow will be visible in coming quarters when it comes to new customers. How big is this number?
Are we talking about some 10,000 or how many subscribers you have won which are not yet visible in your numbers? And then maybe the second question is relating to Polystar acquisition, which is quite nicely filling your offering what comes to Elisa Automate. Do you need to make some further M and A in Elisa Automate going forward? Or do you see that your portfolio is now basically completed on that front? And maybe just generally on digital services, how good M and A opportunities are you still seeing there and how eager you are implement them in coming years?
All right. Regarding the net adds, we are not giving a guidance for net add development going forward. But what we can say, for example, from this public customer deals, because they are quite large frame contracts, so we have tens of thousands of new customers coming in, in coming quarters. Timing is a bit still, of course, up to the customers, but we, of course, are actively working to get to the best mobile networks in Finland. But then the net impact is, of course, dependent on how we will compete in the other customer cases.
However, we are quite comfortable on our competitiveness as we have been able to show with these numbers and these executions in the past quarters. But just taking along these public sector customers, there are tens of thousands of subscriptions coming in the next quarters. In terms of the Polystar, we as we have communicated, we have a strategy to grow our digital services, the international digital service businesses, also with the help of acquisitions, first now bolt on small medium type of businesses. And we are not in a desperate need, but we see that as a first further opportunity to accelerate. Now the Polystar is opening us doors to 100 other operators with their sales force that we can have Elisa Automate product line introduced to them and slightly have a positive impact to Elisa Automate sales, while Polystar is executing their very successful own business at the same time.
So they are very complementary. We are not in a desperate need to buy further companies, but we have an opportunity, of course. And there are quite a few potential targets that we might buy, but we are not in a desperate need. We, of course, want to make value increasing acquisitions so that they are creating shareholder value to our shareholders, but also that they are nicely fitting to the Elisa Automate Polystar family. Overall, with our digital service businesses, international digital service businesses taking the smart factory and videoconference also, we have also potential M and A opportunities there.
No desperate need to buy something, but more as an opportunity to find suitable good deals.
Maybe just a quick follow-up relating to cost efficiency actions. And basically, whether the message is still unchanged when it comes to benefits that we basically have seen some in Q2 and full benefits will be visible in the second half of this year. Is this still the message?
Exactly. We as we said that we have accelerated productivity improvements taking more impact to the second half of the year. We are executing according to the plan. And if I may add just one clarification or add to the earlier answer, while we have these bolt on acquisition opportunities in sight for the coming quarters, those will not have impact on our dividend policy.
Very clear. Thank you.
You're welcome.
All right. Thank you. At the moment, we don't have any further questions from the audience. And there are a few questions coming from the conference call lines. Let's take the first one, please.
Thank Our first question comes from the line of Abelash Mauthlada from Berenberg. Please go ahead. Your line is now open.
Yes, good morning. Thanks for taking my question. I'd just like to come back to the sort of corporate segment, please, on the performance there. Because you obviously saw a very sharp decline in the ARPUs. I think ARPUs were down about 5% year on year.
And you've talked about the sort of changing subscriber mix as some of these lower priced sort of new contracts come into effect. So I'm just wondering as we sort of roll forward and these sort of new tens of thousands, sort of new customers that you expect to onboard in the coming quarters. I'm just trying to think is it fair to assume that we should see, sort of ARPUs continue to come down for a while as you sort of move towards a new lower level of ARPU because of this deflationary pressure? And just as a follow-up on that, can I just also confirm if the sort of corporate net adds have any sort of significant machine to machine kind of SIMs in there, which might also be deflationary for ARPU? All
right. These corporate net adds doesn't have any significant amount of machine to machine subscriptions in them. So they are quite kind of normal subscriptions for persons to use in the companies or organizations. In terms of the ARPU forecast, like I said, we are not giving ARPU forecast neither. But of course, while we are adding lower ARPU public sector customers, it has a dilutive impact to the ARPU.
But we have also positive impacts to ARPU from upselling higher speeds in the rest of the B2B customer base, which is much bigger than even if we are adding some tens of thousands of B2B customers, our corporate customer base is much, much bigger. So what the kind of net impact for the ARPU development of these two different trends will be remains to be seen. But the main thing is that we see quite positive development of the mobile service revenue side overall on absolute terms for the corporate segment.
And just a very quick follow-up on that. So in terms of the sort of underlying trends, you said, obviously, you're sort of seeing success in being able to upsell your corporate customers onto higher sort of value packages. I'm just trying to think about the sort of push and pull there. So you've got that's a positive. But then on sort of negative side, are you seeing more pricing pressure when maybe you try and renegotiate contracts or renew contracts with some of your corporate customers?
And is the net of those two still a positive for you?
Well, as maybe we have earlier discussed, the corporate segment really for us is consisting of three different areas: the entrepreneurs, the SME segment and then the large customer segment. And the competitive dynamics varies in these three segments. What we've now seen mainly is the, let's say, more intensive competition in the large customer segment, which is maybe onethree of the total mobile or total B2B segment. And in that area, we have clearly seen our competitiveness. We have seen some ARPU decline for some customers and now for these new public sector customers.
But overall, what we see overall for the Corporate segment with these three subsegments that the tough competitive situation is overall and in general pretty much what it has been always. And we are comfortable that we can have positive development for the total revenue in the Corporate segment.
That's very helpful. Thank you.
You're welcome.
Thank you. Our next question comes from the line of Stephane Gaffer from DNB. Please go ahead. Your line is now open.
Yes, hello. Coming back to the mobile data growth, it declined quarter on quarter. Can you give some can you explain if there are any sort of one off type impact in here? And secondly, have you seen any change in the momentum relating to speed upgrades for the subscriber base? And so it's a question on if subscribers are waiting now to jump on to five gs.
All right. In terms of mobile data growth rates changing from 2.1% we had in the first quarter to 1.9 They are relatively close to each other when you think about the different dynamics that is taking place. But of course, the negative impact of mobile service revenue growth is coming from the corporate segment, large customer segment, some customer cases where these lower prices we've taken we've experienced, especially last year, for some cases, have now materialized. So that has been the slight negative impact that we've seen. In terms of the speed upgrade momentum, we see customers moving ahead with the four gs speed upgrade still.
We don't see so much customers yet starting to wait for five gs in order to because we have a very good four gs higher speed tiers as well to offer before customers who many are expecting to have a bit less more affordable five gs devices coming next year. So that's what they are more waiting than waiting for speed upgrades.
Can I come back here? I was talking about the mobile data, the 1,000,000 gigabytes, that has been growing every quarter, and now it's a sequential decline. I'm just wondering if there is something that's impacting this.
Like I said already earlier when I addressed this same question that sometimes with these developments, there is some leveling off, but we are very comfortable that the usage will continue to grow with our customer base. Customers continuously moving to higher and higher speed subscriptions where they can kind of consume more mobile data for their video and other applications.
Okay. Thank you.
Thank you. Our next question comes from the line of Henrik Herbst from Credit Suisse. Please go ahead. Your line is now open.
Yes, great. Thanks very much. I had two questions. Firstly, just a follow-up on B2B again. So I guess you've got a pretty good visibility on big contracts coming in.
I presume you have would have the same visibility on contracts lost and sort of customers migrating off to other operators. Are you seeing any of that? Or is it sort of more of a question what contracts will be up for renewal and whether you'll sort of win or lose contracts from here on? And then secondly, if you can give an update maybe on the competition in the consumer segment. I guess it was pretty tough last year and got a little bit better in Q1, it sounded like, and sort of what you're seeing below the line promotions, etcetera, in Q2 would be great.
All
right. Well, we started to see as earlier communicated, we started to see some new kind of behavior for pricing in some of the large customers, corporate customers early last year. And we lost some customers, as we explained first quarter, and we saw the increased churn because we had the migration of those customers out from Elisa during the first quarter. While understanding that there are also some new dynamics in the Corporate Large Customer segment pricing sometime last year, we, of course, learned about that. And since then, we have been very competitive, and I'm not expecting us to lose customer base.
We are not searching for more increase in our market share in large B2B customer base. But since we have been now learning to use the pricing different way, what we learned, we have been winning actually more than we've lost. And definitely, we're going to defend as long time we have said that we are defending our market share even with the cost of some short term pain with lower prices. When it comes to the Consumer segment, the competitive intensity didn't change in second quarter so much comparing to the first quarter. However, of course, the competitive intensity now in the second quarter was not at all to the level what we saw a year ago and at the same time.
That's great. But so given your the visibility you got in sort of contracting B2B, you're not expecting to have a big outflow of customers in the second half. Is that correct? Did I understand that correct? Yes.
Yes.
Thank you. Our next question comes from the line of Chi He from Citi. Please go ahead. Your line is now open.
Hello, good morning. Thank you for taking my questions. I just want to follow-up on the B2B side, if you don't mind. I mean, if I can understand is that your ARPU is down 5%, but obviously, you had a good ad and reducing churn. I'm just wondering if it's fair to say that your B2B strategy now is to be more proactively repricing your offers to keep your dominant position.
I mean, I understand that your competitors has been quite pricing aggressive. But given that you're successfully in capturing the municipality public contracts, I wonder if you see have any response so far from your rivals. And my second question is on the Polestar. I was wondering if you can give us some visibilities on how the business has been growing in terms of revenue and EBITDA over the past, let's say, two to three years. Okay.
In regards to the B2B side, the competitive dynamics, like I said, for the first is a bit different in relation to which sub segment we are talking about B2B business. When we talk about the large customer segment, the situation varies really very much on case by case basis. For many of the customers, we have very good competitive situation because our quality of service in the past couple of years is really very, very good. Our customers are really happy customers. We have also been able to provide the largest portfolio of different kind of digital services to our customers, also making our customers even more happy.
And every now and then, when somebody is knocking our customers' door with very low prices, we also learn to respond to those kind of things a bit more than we did. So in that respect, we see that we are in a very competitive position. Of course, when some of the customer cases in the last customer segment will be repriced at lower price level a bit more, we, of course, continue more fiercely with our productivity development in order to make sure that we are making good profit. And as you have seen, the profitability of the Corporate Customer segment has gone upwards. In terms of the Polystar numbers, I can refer to Jari that Jari can give you a bit light on that, please.
Yes. Polestar has had good growth numbers in the past years. Indeed, revenue has been growing with double digit growth rates. And also, margins have been improving, that EBIT margin is clearly in double digit area. 2019 versus 2018, there was 17% growth in revenue and even much higher growth in earnings.
However, that was partly helped by currency exchanges. But excluding even excluding those EBIT margin, as said, is clearly in double digit
Thank you very much.
You're welcome.
Thank you. Our next question comes from the line of Andrew Lee from Goldman Sachs. Please go ahead. Your line is now open.
Yes. Good afternoon, everyone. Just a question on a topic that is being raised in almost every other conference call over the last three to six months with operators, but you haven't touched on, which is just on your network and particularly your mobile towers. Other operators are basically having to try and look to these to drive efficiencies given that their returns are so minimal. But presumably, you have an opportunity to raise returns further by being more efficient with your powers.
And just wondered if you could give us a little bit of color in terms of how you think about maximizing the efficiency of your mobile towers, what kind of degree of network sharing you have at the moment and what, if any, is the opportunity there? Thank you.
All right. Thank you, Andrew. In regards to the towers, of course, that's one area where we also are looking always the to improve our efficiency productivity. At the moment, as you know may know, in Finland, we are sharing somewhat the usage of towers between all the three operators. We have situation where our two competitors also share their networks in the Eastern part of Finland, where there's 15% of the population.
There's nothing specific in terms of the efficiency, but of course, that's an area where we look at all the kinds of opportunities to improve our efficiency, which will help us going forward as well as one ingredient of our efficiency improvement. Thank you. You're welcome.
Thank you. Our next question comes from the line of Peter Kurt Nordson from ABG. Please go ahead. Your line is now open.
Thanks a lot. You'll be thrilled to hear that I have another question on the Corporate segment, please. But I'll be specific. Since given the size of these net adds from the public sector, could you tell us really, Matty, or an indication what is the ARPU we are talking about here? Is it €4 €5 for these public sector contracts, please?
You, Peter Kurz. I'm sorry, I cannot give you our customers' prices. So I cannot really give you any light into that. But just as an indication, the numbers you gave seems a bit low to me.
Okay. And did you want to secondly, just is there any significant new corporate contracts coming up for renewal without being specific over the coming year or two perhaps that you would say or highlight to us, Not names mentioned, of course, but any periods with particular renewal of contracts that are coming up?
The corporate B2B customers, they are kind of renewing their contracts, as you may know, continuously depending on how long contract periods they have from one year to even to seven year. There's no kind of change with the rhythm or so how the contracts will be renewed going forward. So there is no acceleration of contract renewal, not so much deceleration. That's quite business as normal for us that there will be coming contract renewals with a certain pace continuously. And of course, we are quite active, of course, to make sure that our customers are happy to continue without any major administrative hassle for negotiating with many vendors and so forth, but just continue with the good service they have got from us.
Superb. Thank you for that.
You're welcome.
Thank you. Our next question comes from the line of Adam Fox Ramleigh from HSBC. Please go ahead. Your line is now open.
Thank you very much. I have two questions, please. Firstly, I wanted to ask about the strategy around mobile equipment sales. If I look back over the last few years, the level of sales are up quite substantially, but now it's down maybe 10% for the last couple of quarters in a row. So I wondered if anything had changed in your appetite for those sales or whether it's a marketing?
And then secondly, if I look at the difference between the churn levels in Estonia and Finland, there's an enormous difference. And the trajectory in Estonia has been very positive over the course of the last year or so. And so I wondered if you could talk about what you're doing there to improve churn and whether or not there's any scope to take any learnings back into Finland or whether it's all just completely market specific and a function of the prevailing competition? Thank you very much.
All right. Thank you. In terms of the device sales, we are the largest seller of mobile devices in Finland, and we have very much appetite for that going forward. Now the development in past quarters, again, there has been some impact from the Google, Huawei, Android kind of announcements, but also the different quarters have a bit different timing for new gadget or device introductions to the market. And there are some other elements impacting on how much we are selling time to time.
We had pretty good successful quarters, very successful quarters with some introductions with a comparable quarter. So that also has some impact that when you don't have very good quarters, then it looks like it is and it is then showing a bit negative. But going forward, of course, we have appetite and we are the first one who has introduced five gs devices to Finnish market, and we continue to provide a very good portfolio of devices to our customers. In terms of the churn in Estonian market being quite much lower, yes, the Estonian market is different market environment comparing to Finland, like all the countries pretty much have a bit different competitive dynamics. Of course, our organization in Estonia has executed and performed really well.
And certainly, we are taking learnings, and we have been taking learnings from our Estonian operations, anything we can learn, and also other directions. So that's what we do constantly with our business, that we take learnings to both directions.
If I could just follow-up on that last one. Those are helpful comments. Has the addition of Star Man in Estonia led to improvements there?
Of course, the Starman acquisition has helped us to even improve the, let's say, customer stickiness because many customers have now more and more services from us. Also, as we expected and we planned, the cross selling has been working pretty well between the Starman and our Elisa service portfolios.
Our next question comes from the line of Nick Priestowen from UBS.
Afternoon. Thank you very much for taking my questions. My question on B2B have been asked,
but perhaps just two follow
ups on the early questions around revenue guidance. I appreciate you don't guide on individual revenue line items. But given the reiteration of guidance this morning, I was wondering if you can help us think about how you see the broad building blocks to go from the slight negative position we have here in H1 today to the guidance of flat to slight growth. And then presumably, when you set your guidance, you weren't factoring the benefit of Polystar into these numbers. So can I just confirm that you believe you'd still be able to achieve your revenue guidance without the positive benefit of Polystar?
Thanks for your question. I didn't quite hear well your first question. Can you repeat the first one? Is there something Yes.
Was just to understand,
I suppose, how we go from the situation we have in H1 where we're sort of slightly negative to a position of flat to slight growth in terms of full year revenues? And then it was just the question around Polystar.
So you're talking about the total revenue, Ateliza? Correct, yes. Okay. As we have said, we have had some divestment to impact the first half of the revenue, the interconnection prices to decline and now also the momentum in the device sales side being a bit less successful as we had with the comparables. Those are the main reasons for decline.
How that will develop going forward, we, of course, are very comfortable for our guidance for same level or slightly higher revenue development for the full year. And you asked also that whether that would hold without Polystar. The answer is yes.
Thank you very much. Very clear.
You are welcome.
Thank you. Our next question comes from the line of Simon from Barclays. Please go ahead. Your line is now open.
Hi. Simon Cowles from Barclays. Thanks for taking the question. Just on the fixed revenue, which I haven't really talked about much. At CMD, you gave some quite helpful indication on what the different revenue lines in the fixed revenues are doing.
Has there been any major changes to that? Are you seeing anything different in some of those lines? Just wondering if you can give us some more color on what the drivers are on the fixed revenues. That would be great. All
right. In terms of the fixed revenue side, there are several drivers or fixed revenue streams that are coming. The fixed broadband has been slightly down now because of some of the price pressure coming from the MTU business and also the some decline that we said, which was partly one off type of decline. Other than that, the fixed broadband revenue side is pretty stable. Fixed Voice, of course, bringing the revenues down.
Then we have some corporate data networking and cybersecurity and some other areas where we see a pretty good stable or slightly growing development on the fixed revenue side.
That's it, helpful. Thank you.
You're welcome.
And as there are no further questions registered at this point, I
will hand the word back to
the speakers for any closing comments, please.
Okay. Thank you for those questions. Any further questions from audience? No, there seems to be no further questions. So thank you for participating this meeting and conference call, and we wish you a very nice summertime.
Goodbye.