In 2019, the turnover of Tet group increased by 7% amounting to EUR 226.3 million or an absolute record since 2008. According to consolidated unaudited financial data, Tet group also managed to achieve the highest share of export turnover ever: 13%. However, its EBITDA (operating profits) was the same as a year ago. Last year, technology and entertainment company Tet underwent major changes: its name and brand were substituted, and new services were developed by launching digital transformation and investing in service accessibility, better customer experience and more efficient operations.
In 2019, Tet invested EUR 30 million in development, paid EUR 47.5 million in taxes and EUR 32.5 million in 2018 dividends to shareholders, incl. the Republic of Latvia: EUR 16.6 million.
Export turnover increased by more than 30% amounting to 13% of the total turnover, which is 3% more than in 2018. This growth was made possible by development of data centre services and construction of fibre optic networks in Germany.
“2019 confirmed that we compete not so much with the local players, but more with the international ones. This illustrated our current approach: to look into the future instead of thinking about the past. Undoubtedly, the most visible change in 2019 was the new name – even before this change the new brand was recognized by 74% of respondents, while in the summer of 2019 it was already well known to no less than 99.9% of respondents. This year, the company will focus on digital transformation, which entails restructuring of services, internal IT systems and business processes, as well as operational methods to improve customer experience, significantly reduce customer service times and further streamline our operations,” explains Juris Gulbis, Chairman of the Board of Tet.
Last year, Tet maintained its turnover from primary services and increased the share of turnover generated by exports and new business services. Data transmission turnover increased by 5%, and the share of turnover from internet and TV services also increased by 1% irrespective of the fierce competition in this sector. It demonstrates our ability to offer advanced and convenient services in stable sectors, where more and more international players tend to enter.
By increasing our market share to 12%, the turnover was doubled in the energy sector. Furthermore, revenue from construction projects increased by 36% in comparison to 2018 results of Citrus Solutions. New business lines: advertising services, computer servicing, data centres and equipment sales also boasted notable growth.
Turnover from cloud services increased more than twofold thanks to interest from Latvian and foreign companies, incl. from Ukraine and the other Baltic States. It can be attributed to better awareness about the need to keep your data safe, as well as fewer barriers to outsource data storage. It is expected that combination of cloud services with development of IT and data security services will continue to grow, as protection against data leaks and system hacking is becoming ever more relevant. Thus, this year we plan to increase the capacity of our data centres. Furthermore, a new cloud platform TetCloud has already been introduced for customer convenience and easier browsing and management of services.
In 2019, Tet Big Data Lake was launched; it allows to compile and store large amounts of data and will serve as a basis for further development of data solutions, for example, facilitation of customized customer experience, process automation and better efficiency. Already last year, a customised content algorithm was introduced for Shortcut customers, as well as a recommendation tool for appliance and equipment purchases. We have also started developing an algorithm for remote troubleshooting of problems before our customers even notice them. This year, we will continue developing machine learning solutions with a special focus on network quality proactively preventing possible technical challenges and providing ever better services to our customers.
In 2019, Tet continued developing its digital customer service channels resulting in almost 45% of customer questions being processed digitally via chatbot Anete, chatting with an operator, or by e-mail. The chatbot Anete is already able to correctly answer 81% of questions and manages approx. 1200 answers to more than 80,000 variations of questions: various types of phrases and expressions, word combinations and keywords. To further develop customer services and improve efficiency, we have started developing new solutions based on the text-to-voice and voice-to-text technologies, which will be presented to customers as early as the first half of this year.
Customized content for Latvian audiences
The Shortcut app boasted the most impressive growth: at the end of 2019, it had twice as many customers as in 2018 maintaining its leading position in the Latvian and global streaming market and outrunning even such notable brands as Netflix. Furthermore, the Shortcut app was upgraded, and the new Helio iTV computer version was introduced to ensure progressive service coverage and availability from any type of devices: TVs, computers, tablets and smartphones.
Successful content strategy contributed to the growth of TV business ensuring a quality range of TV channels and an impressive content offering that focusses on self-produced and other Latvian content, series and movies from HBO and other leading studios, as well as sports shows. In 2019, we offered 64 Latvian movies to our viewers, incl. animated and documentary movies, or at least one new movie per week on the average, thus improving their availability throughout Latvia. Last year, the most popular movies were “Klases salidojums”, “Lote un pazudušie pūķi”, “Kriminālās ekselences fonds”, “Jelgava 94”, and “Nekas mūs neapturēs”. In addition, Helio Media offered 24 new series, shows and broadcasts, incl. the first Latvian-Ukrainian series Markuss. In 2020, we plan to expand the offering even more. This year, the viewers will be offered new and thrilling global series and sports broadcasts, incl. IBSF World Championships, Summer Olympics in Tokyo and broadcasts from other global competitions, where Latvian athletes take part.
High quality network: the foundation of fast and stable Internet 24/7
By developing a global cross-border fibre optics network Baltic Net, Tet continued strengthening its export position in the internet infrastructure sector. In 2019, Tet launched its high capacity connections Riga-Vilnius and Riga-Stockholm that are able to deliver data speeds of up to 100 Gbit/s. This speed allows to download 10,000 photos or songs, or 50 HD quality movies in just three seconds. Currently, Tet’s Baltic Net already has ten hubs, connecting Riga with several cities in eight countries: Tallinn, Vilnius, Stockholm, Helsinki, Kaunas, Frankfurt, Warsaw and Kiev. In 2019, Tet also continued investing in the security and efficiency of its IT infrastructure.
This also applies to construction of the fibre optic network that allows to offer an internet connection with fast and stable speed. In addition, more investments were made in increasing the data transmission speeds and accessibility of the most advanced copper networks. Planned disabling of the old voice services network and transferring the services to more progressive technologies like IP voice and fibre options was also started. As people’s habits and technologies change, not only more time is spent online, but also more data are consumed. As a result, last year Tet increased the speed of internet twice for fibre optics users. The public tends to consume ever more content (more videos, social media messages, news, movies and series), and the resolution or quality of the content also tends to increase. Currently, HD movies are considered a norm, and the same applies to an increasing number of HD TV channels. Furthermore, in an average family data are simultaneously consumed by 5-6 devices. The increased data flows result in a demand for greater speeds and transmission stability even in the evenings, when the networks experience most traffic, as well as in densely populated areas where mobile networks occasionally cannot offer stable speeds.
Tet Group consists of Tet, Citrus Solutions, T2T, Data Experts, Helio Media, and Baltijas datoru akadēmija. Tet owns 23% of shares of Latvijas Mobilais Telefons LLC.
Tet is owned by the state public limited company Publisko aktīvu pārvaldītājs "Possessor” (51%) and Tilts Communications, a daughter company of Telia Company (49%).