Thank you very much. A wonderful good morning from a sunny Vienna. We look back to, I think, quite reasonable second quarter, but the details will now be presented by Thomas Arnoldner, our CEO, Siegfried Mayrhofer, our CFO, and Alejandro Plater, our Chief Operating Officer. I hand over to start with to Thomas, who will go through the highlights of the second quarter. Thomas, please.
Thank you, Hans. Hello, everyone on the call, whether you're in an office or on a beach. As you have seen, we have again posted solid results for the second quarter. We were again able to grow our revenues. They increased by 7% to approximately EUR 1.3 billion. This increase was mainly driven by value-protecting pricing measures, or read them also as inflation-linked price increases, and the continuation of our upselling activities. Based on the better-than-expected first half of this year, we also decided to raise our revenue guidance from around 4% to now around 5% growth for the full year, 2023. This positive revenue development led to an EBITDA increase of 6% to EUR 486 million, despite higher operating expenses. These operating gains were fully offset by the lower financial results.
Higher interest rates compared to the second quarter of last year resulted in higher interest expenses. In addition, the financial result was negatively impacted by exchange rate effects, mainly by the Belarusian ruble devaluation against the euro. Our capital expenditures increased by EUR 148 million to EUR 359 million. Of this amount, however, approximately EUR 110 million was invested to secure our spectrum in Croatia for another 15 years. In addition, investments in the broadband rollout, particularly in Austria, were higher than in the prior year. As a result of the higher CapEx and changes in working capital, the free cash flow amounted to EUR 30 million. The AGM on the 7th of June approved a dividend of EUR 0.32 per share. In mid-June, we paid this dividend totaling EUR 230 million to our shareholders.
In June, the International Credit Rating Agency, Fitch, published its first rating for A1 Group. The long-term issue rating of A- with a positive outlook is the best Fitch rating for a European telco today, and we are now rated by all three major international rating agencies. At the end of June, we invited to an extraordinary general meeting regarding the spin-off of the tower business. This meeting is scheduled to take place on August 1st, 2023. If we take a look at our subscriber numbers, you can see on the next slide that in the second quarter, we continued to grow our mobile subscriber base, which increased by 5% year-over-year to now 24.5 million subscribers. This growth was largely driven by the, again, strong growth in the machine-to-machine business.
Excluding machine-to-machine customers, the subscriber base remains more or less stable. In the fixed-line business, the number of revenue-generating units increased by 1.9% year-on-year, while again, the number of voice RGUs decreased, the number of broadband RGUs and TV at home RGUs increased, and the RGU growth in the international operations, especially in Belarus and Bulgaria, more than offsets the decline in Austria. If you look at ARPU, the group ARPU was flat year-on-year. ARPU increased in the second quarter by 2.6%. Taking a closer look into the markets, Austria first on the next page.
The intensified competitive environment, which we saw in the second half last year, has increasingly eased in the course of 2023 and has reached kind of a normal competitive intensity. As also discussed in the last call, in more or less April, we have implemented value-protecting pricing measures, so price increases according to inflation, which had a positive impact, particularly on the zero-rating service revenues. We have also continued our upselling efforts.
Our focus for some time now has been the expansion of the broadband network, both on 5G, where we have the 5,000th 5G site installed in spring, as well as on the fiber site, where the expansion of our fiber optic network is also progressing, a bit somewhat higher, slower than planned because of some bottlenecks in the construction capacity, and the entire market is experiencing. Our solution and connectivity business continued to grow, although at a bit slower pace in Q2 than in Q1, due to a larger project, which we had in the second quarter of the last year. On the cost side, again, the main driver was electricity cost, which rose sharply, both in Q2, as well as in the entire 1st half of the year.
Siegfried will provide a little bit more details on this later on. The equipment margin improved in Q2, however, this could not compensate for the subsidy-driven lower equipment margin, which we had in Q1. The restructuring expenses were lower as a result of lower long-term restructuring provisions due to interest rate movements. Looking into the international segments, this also performed well, with the exception of Belarus, where the environment is particularly challenging. First international market, Bulgaria, where service revenues performed very well, driven by the continuing upselling and the value-protecting pricing measures implemented in March, but as well STEMO, which we acquired in summer last year, which contributed EUR 14 million of revenues in the second quarter. In Croatia, the mobile business developed well, as did the equipment sales.
In Belarus, as just mentioned, the business is challenges. There has been a strong upward trend in costs, while on the revenue side, restrictive price regulations limit our ability to adjust the prices accordingly. In addition to that, the Belarusian ruble depreciated against the euro, negatively impacting our revenues by around EUR 14 million and EBITDA by around EUR 7 million in the second quarter. In Serbia, mobile service revenues developed well, and the equipment margin also improved. In Slovenia, service revenues also went up. However, the inflation is impacting decreases, especially higher electricity costs. In North Macedonia, upselling, as well as higher mobile subscriber base and more ARPU compared to the last year, helps to increase our revenues on the cost side here, we see an easing of the electricity costs, while the workforce cost is increasing.
Talking about the workforce, Sieg to take a bit closer look on those financial.
Thank you, Thomas. On slide number seven, we would like to show you the drivers of group revenues. Q2, total revenues grew by 7.5% year-on-year. Service revenues were up by 5.5%, benefiting from the already mentioned upselling and the new protective pricing measures. Equipment revenues grew by 20%. STEMO in Bulgaria was not consolidated in the first half of 2022 and had a positive impact on total revenues of about EUR 14 million. This amount was offset by the depreciation of the Belarusian ruble, which reduced revenues by about EUR 14 million. In terms of revenues, Austria continued to be by far the largest market in terms of revenue, ahead of Bulgaria and Croatia. In the second quarter, Bulgaria was the fastest-growing market, even when excluding STEMO. On the next page, the profit and loss statement.
Since we have already discussed revenues, I will start with OpEx. Electricity costs were up 34% year-over-year. This is mainly due to Austria, where in 2022, we still benefited from electricity supply terms prior to the Ukraine crisis. However, these contracts have expired, resulting in higher prices for electricity to be paid in 2023. In addition to the electricity costs, in particular, workforce costs and product-related costs, such as content costs, as well as licenses and software for resale increased. The weakening of the Belarusian ruble had a negative impact of EUR 7 million on EBITDA of Q2. Restructuring expenses were slightly lower than last year. The solid operating performance was fully offset by the deteriorated financial result.
Higher interest rates, compared to the second quarter of last year, resulted in higher interest expenses. In addition, the financial result was negatively impacted by exchange rate effects, mainly, predominantly, the Belarusian ruble against the euro. Bottom line, the net result was slightly below last year's second quarter. On free cash flow, the free cash flow is significantly lower than last year. This is due to higher CapEx and changes in working capital. CapEx includes an investment of EUR 110 million in spectrum in Croatia, as Thomas already mentioned, and higher investments in broadband. This mainly affects Austria, but also other markets such as Croatia. Working capital effects include higher inventory, inventories in increase in installment sales. Free cash flow, excluding spectrum, was at EUR 140 million, compared to EUR 171 in the second quarter of last year.
With this, I hand over back to Thomas.
Thank you, Sieg. I would like to take this opportunity also to talk briefly about the topic which is not directly related to the quarterly results, which is the planned spin-off and listing of the towers business. As you've probably seen, the listed tower company will be called EuroTeleSites, as I said earlier, our shareholders will vote on the spin-off at an extraordinary general meeting on 1st of August. We will approach investors in September inform them about the tower business in much more detail at the Capital Markets Day, we will also go on roadshow. Rest assured, you will get all relevant information comprehensively and in time before the transaction, which we expect to be completed by September, October. Timeframe, just a few KPIs, which we can give you today.
Based on the pro forma results of 2022, the tower business would have generated revenues from leases of EUR 230 million, and EBITDA after Leases of EUR 127 million. As of the 30th of June, the business comprises more than 13,200 macro sites, and the tenancy ratio currently is at 1.2. We also announced the designated management team, and we are happy that with Ivo Ivanovski, who will be the CEO, we have an experienced manager coming from A1 Group. He has led the tower separation project in A1 Group for the past years. The CFO will be Lars Mosdorf, who has a lot of experience in the infrastructure business, 16 years, and most recently, he was a CFO at Düsseldorf Airport.
Now, last and finally, before we move to the question, as I said earlier, an update of the outlook for the year 2023. As I have already mentioned, based on the better-than-expected first half, year revenues, we are raising the revenue guidance from previously around 4% to around 5%. What remains unchanged is the CapEx guidance at around EUR 950 million. Please note, as always, that we are guiding CapEx, excluding investments in spectrum. Before we move to the questions, let me just point out that this will be the last call we will be doing, the three of us, as previously announced.
Siegfried has decided to open up a new chapter in his life after having spent, I think, 23 years in the company, 14 years in board functions, there of nine years in the group board. He has contributed a lot to the success of the company on a professional level. Lately, just reflected, I mentioned in the very beginning with the upgrade of the Fitch rating, but in many other areas as well. We will miss him also on a very personal level. As he is based in Vienna, we will be able to stay in touch on a personal level. I just want to say thank you, I think also on behalf of Alejandro and the entire team to Sieg for what he has done.
We will miss you also, obviously, on these calls. With that, thank you very much, and, I'm handing back to Hans.
Yeah. Also, thank you very much, everyone, for following today's presentation.