Since 1 January 2015, hyperinflation accounting according to IAS 29 has no longer been applicable for Belarus. This was ruled by a committee of the big four audit firms as the accumulated inflation rate fell below 100% as well as due to other factors that were taken into account. As a result, period-average FX rates have been used for consolidation purposes since Q1 2015.
Throughout the year under review, the macroeconomic environment in Belarus deteriorated due to the recession in Russia. Already in January 2015, the Belarusian Rouble strongly declined in value. After comparably stable development, it took another hit at the end of August. During the rest of the year, Belarus' currency remained almost stable, losing 29.2% in value overall (2014: –9.0%). At 12.0%, the 2015 rate of inflation was slightly below the level of the prior year (16.2%).
In light of these developments, velcom's management team continued to concentrate on a tariff and equipment portfolio centred around on smartphones and tablets in 2015 in addition to its positionas a premium provider with a high network quality with theaim of benefiting from the rising demand for data. Furthermore,the company continued to focus its efforts on optimising operatingexpenses and disconnecting them from currency effects.
velcom’s customer base remained stable at around 4.96 millionin the year under review. The 8.7% jump in the number of mobilebroadband customers to around 308,800 reflects the continuousrise in demand for data services as mentioned above. velcom’smarket share remained almost unchanged at 42.5% in the yearunder review (2014: 42.4%).
Including negative currency effects in the amount of EUR 75.3 mn,revenues fell by 7.9% year-on-year to EUR 327.1 mn in 2015. Localcurrency revenues rose by 20.2%. Inflation-related price adjustmentsat the end of 2014 and as of 1 December 2015, upsellingeffects and steadily increasing data usage were the main reasonsfor growth in monthly fee and traffic revenues. Equipment revenuesalso climbed as a result of devaluation-driven higher pricesfor handsets. velcom also generated higher interconnection revenues,primarily as a result of increased international tariffs. Owingto the negative exchange rate development, average monthly revenueper mobile user (ARPU) sank from EUR 5.1 to EUR 4.6.