1&1 AG
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1&1 AG
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Good morning, everyone, and welcome to our Q1 2022 conference call. During this conference call, our CFO, Markus Huhn, will first go through the highlights of the first quarter '22 and then walk through our financial numbers and presenting the latest update for the build and the rollout of our 1&1 mobile network. After that, as always, we have time for the Q&A.
With that, I hand over to Markus. Markus?
Thank you, Oliver. Yes, good morning. This is Markus speaking. Yes, a warm welcome to all participants in the call from my side as well. I would like to give you an overview to the performance of Q1 and the financial results. Please let us step into the presentation with Slide #4, the customer base. We have increased our customer base with 60,000 new contracts in the first quarter, plus 90,000 mobile contracts and a decrease of minus 30,000 broadband lines. These numbers are reflecting that what we have already mentioned during our last call in March this year, the growth in Q1 is encumbered by minus 90,000 contract leavings because of the latest amendment of the Telecommunication Act.
So our operational performance without this negative impact is plus 150,000 contracts, which is above the Q1 performance in 2021. As we have already explained in the last call, we see this impact as a temporary impact in this year because of the shorter cancellation period of 1 month. To understand this issue, you have to differentiate between the moment when the customer cancels his contract and the moment when the contract will finish.
Before the last amendment of the Telecommunication Act, there was a minimum of 3-month difference between the moment of cancellation and the moment of finishing the contract. After the last amendment, in many cases, there is just a difference of 1 month instead of a couple of months, which leads temporary to a higher number of leavings. So the conclusion is the number of cancellations is still on the same and a low level. But we have temporarily a higher number of leavings because we have to close the contract earlier than before.
Yes. Let us go to revenue on Slide #5. You can see revenue in first quarter 2022, with EUR 975.9 million, which is more or less the same as in the year before. Service revenue was EUR 789.1 million and a plus of 3.5% is still on a solid growth path. The other revenue, mainly hardware revenue is below 2021 with minus 11.7%. This is caused by a lower number of transactions and a lower demand out of our customer base for new smartphones. Furthermore, we have a shift between the first and the second quarter in later delivering -- the deliveries of smartphones to our customers.
Let us go to the EBITDA by segment on Slide #6. In the Access segment, we have realized EUR 195.4 million in the first quarter, which is a solid increase of 11.6% compared with the year before. The year before, in the EUR 175.1 million. This amount doesn't include the EUR 34.4 million non-period income in 2021 as also mentioned on the Slide #8. The minus EUR 8.3 million EBITDA in segment 1&1 mobile network is including our activities for the start of the rollout of the network.
Now, I would like to go on the status of the one-on-one mobile network. Slide #8. Yes. On the Slide #8, you see the issues that we -- that have already been realized since 2019. Whilst the negotiations and the agreement for national roaming took 2.5 years, we were -- we could start with the negotiations of the contract that we need to build up the network in 2021. So that means we had 1 year to prepare all the -- yes, the necessary agreements that we need after we had finished the national roaming agreement in May last year.
So most of the topics and issues have already been mentioned in our last calls. There are 2 new topics since our last call. One is the new contract with GfTD and the contract with American Tower Cooperation for co-location. Both contracts have been signed in April this year.
On the next slide. After we have all partners on the start that we need, our target is to be able to start with the operational -- or to operate with the 5G net within 1 year. And therefore, we have planned some milestones that you see on this slide. So in Q3 2022, the -- we will realize the connections to Internet nodes, approximately 40 public and private peeries. And we will start a friendly user test in the Frankfurt Main area.
Then in Q4 2022, we start with the operations of approximately 140 regional edge data centers with 24 decent realized edge data centers and with 2 core data centers. And of course, at the end of Q4, we have to finish the first 1,000 antenna sites. We will also launch our first product, which is a fixed wireless access product. Then in Q1 2023, we will build up the connection to national and international telecommunication networks. End of Q2 2023, we are able to start with national roaming. And then in Q3 2023, we will start with the operational of the 5G network with all of the 4 core data centers. We will have the full functionality of national roaming. And then we will also start with the marketing launch and parallel to that, the [ succession ] of the MVNO sales.
So these are the main -- or the most important milestones in the next 12 years -- 12 months, sorry. On the right-hand side on the slide, you see the obligations that we have to fulfill, the first 1,000 sites per end of this year. And the 50% household coverage end of 2030, but our plan is to have this household coverage much sooner than we need for the obligations.
Now we come to the key financial figures for the first quarter. I would like to start with the P&L, Slide #11. Revenue has already been commented. The cost of sales grew up from EUR 651.5 million in 2021 to EUR 659.5 million. Press profit dropped from EUR 322.2 million to EUR 316.4 million. In the first quarter of 2021, we had already mentioned positive non-period impact of EUR 34.4 million, which is included in the cost of sales. Without this impact, the operational gross profit in 2021 was EUR 287.8 million, which leads to an operational increase in the position gross profit in Q1 2022 of plus 9.9%.
Then the costs for distribution increased from EUR 114.3 million in 2021 to EUR 120.7 million, which is driven by higher spendings in marketing. The administration costs was EUR 30.8 million, more or less on the same level as in the year before. The other operating income and expenses with EUR 5.6 million are also in the range of that what we've seen in the year before. We have an increase in the impairments on renewables and contract assets from EUR 17.9 million in 2021 to EUR 23.7 million in Q1 2022.
The profit from operating activities in the first quarter is EUR 146.8 million. In the EUR 162.6 million in the year before, of course, is also the non-period impact included. If we eliminate this impact, we would come to increase, an operational profit increase of approximately 14.8%. Financial result with minus EUR 1.6 million is including the spendings for the investment in white spots. To remember, in the auction 2019, we have agreed with the government to pay the frequencies over 12 years in installments. And we gave the commitment to invest EUR 50 million in white spots. So this investment is reflected in the position financial result.
Yes. Then we come to a profit before taxes of EUR 145.2 million. Tax expenses with minus EUR 43.6 million and the consolidated result of EUR 11.6 million for the first quarter 2022. On the next slide, you see the balance sheet. The balance sheet in total rose from EUR 7,630.7 million at end of 2021 to EUR 7,090.4 million as of end of Q1 2022. There are 2 main changes in the balance sheet. One change is an increase in the short-term assets of EUR 46.1 million, which is driven by investments in the free cash flow with United Internet and the reduction of short-term liabilities by minus EUR 65.9 million.
On the next slide, you will see the cash flow. So the cash flow, the net inflow from operating activities with EUR 83.9 million in Q1 2022, which is lower than in the year before. The reduction is driven by changes in trade and other receivables and payables with minus EUR 59.8 million. And the year before, the balance out of this position was plus EUR 11.8 million. So that's the main driver for the lower net inflow. The cash flow from investment activities was minus EUR 77.4 million. In this position, we have the EUR 21.3 million CapEx and EUR 56 million investment of free cash flow with United Internet.
Then we have the cash flow from financing activities with minus EUR 4.4 million, equal to the year before with EUR 4.1 million. And then the free cash flow, we finished the first quarter with a free cash flow of EUR 62.6 million.
On next slide, we have the EBITDA bridge. So we start with the EBITDA in Q1 2022 with the EUR 187.1 million. Then we have the negative balance out of the trade payables and other liabilities that I have already mentioned on the slide earlier, with minus EUR 56.5 million. The negative impact of minus EUR 13.3 million out of the other working capital positions. Taxes was minus EUR 33.4 million and CapEx of minus EUR 21.3 million. So we come to the free cash flow in the first quarter of EUR 62.6 million.
Now I come to the forecast 2022. We would like to confirm our forecast for this year with service revenue of approximately EUR 3.2 billion. EBITDA on a previous year level of approximately EUR 672 million. In this EBITDA forecast are EUR 70 million included for the one-on-one network costs. The operating subscriber growth, we see approximately 650,000 new contracts, minus 200,000 contracts, which comes out of the shift to the recent amendment of the Telecommunication Act. We see also the EUR 400 million cash CapEx, which is mainly driven by 1&1 mobile network for antennas, computers and software. So many thanks for your attention so far. And now I would like to hand over to the operator for the Q&A session.
We will now take our first question from Jonas Blum from Warburg Research.
Three from my side, please. Firstly, with regard to the potential last mile price regulation in Germany, just foreseeing lower pricing. Can you just quantify for us the positive impact you could expect from this? And is it already included in your guidance for this year?
Secondly, with regards to the GfTD contract, just wondering, are you fully assuming CapEx for this contract within '22? And is it fair to assume roughly EUR 75 million for the 500 sites? And do you expect a subsequent sale and leaseback?
And finally, since you mentioned in your presentation, 50% household coverage that you want to achieve much sooner. Could you just share with us what's your internal ambition here?
Yes, thanks for the question. The impact from price regulations for the tower is included in our forecast, but it's not a high amount. It is a low single million impact in this year.
Regarding GfTD, in this year, it will be CapEx. We have already mentioned earlier, it could be an option to sell these sites that we build up with GfT to a tower co. So that's something that we are negotiating at the moment. At the moment, we do not have an agreement for that. So the assumption is that it will be CapEx in this year. It's included in our guidance. And yes, an option can be that we will sell it, sell and leaseback.
To the last question, when do we see the household coverage of 50%. At the moment, it's too early to give a clear indication. We will -- at the moment, we are in discussions with our partners. Of course, we have agreements with them, and also a clear understanding what the partners have to deliver to fulfill the obligations and to fulfill them much earlier. But that will be an information that we will give on a CMDO.
We now take our next question from Ulrich Rathe from Jefferies.
I have 2 questions, please. So first one is the more technical one on the churn from the disconnections from the telco law. There seem to be mainly 2 explanations by different players in the industry for the impact. One is what you outlined, which is the actual contract end is bunched because the period between cancellation and the contract end is shortened. And the other explanation is that there are a lot of stranded contracts out there, mostly because of attempts to sort of get subsidized or installment -- devices on installment terms.
Now there's a difference between the 2. In the first case, the scenario that you are highlighting there would be a deeper churn pool because if people cancel their contracts earlier and sort of this bunches up, then those people would be seeking new contracts presumably whereas in the second scenario, the industry at large would actually lose contracts because they have stranded contract.
Could you just comment on that -- on those 2 scenarios a little bit, which -- what do you see as the most likely distribution between these 2 effects in your base? And to what extent what you're seeing is really an industry, a reduction of subscriptions compared to sort of just a deeper churn pool for some to lose or some to win?
The second question is a bit shorter, I promise, is on network quality. So when you launch your network and you've outlined helpfully the milestones towards the fully fledged mobile network launch, do you expect at that point to have a quality network that supports the sort of pricing that you have in the market, which is not a discount pricing or certainly not for the 1&1 branded customers? Or do you anticipate that this will be a network where you probably are forced to give some discounts for the initial quality -- for some initial quality issues? So just wondering how you look at sort of 3Q '23 and the network quality that you will be able to deliver at that point in time, but if you're sort of already discounting a bit of a headwind there. That would be great.
Yes. Regarding your first question, we do not see a negative impact on, let's say, conversion rate or orders that are trending because of the installment. So on the sell side, we are more or less quite the same conversion rate that we have seen before the amendments of the Telecommunication Act, whether the process is much more complex than before. So we see 2 impacts because of the telecommunication law. One is the impact that I have mentioned earlier in the presentation with the contracts that leave the base earlier. And another issue is that the local limit where you can stop the service to the customer, this local limit has been increased from EUR 75 to EUR 100. That means that you have to give the service to the customer much longer, even he has outstanding payments. So this is a higher risk on the -- for bad debt. But it's not -- yes, it's a big impact, but it is an impact. These are the 2 issues that we see out of the Telecommunication Act.
Regarding your second question to the launch of the network. Our expectation is that the quality of the network will be minimum on the same standard that we see today. And we do not plan to give any discounts because of any quality problems that we expect. That's not the case.
We will now take our next question from Andrew Lee from Goldman Sachs.
I had 2, hopefully, 3 questions. One was on your applications. We have used Freenet as a distributor, you submitted that application, I think, to the [ Carsell ] office or on if there's any progress in being on that front.
And then secondly, we've seen the removal -- or it looks like we're seeing the removal of some low-end price promotions in the mobile market. I wonder if you could just comment on or the trajectory of competition at the moment that you're seeing. And also whether -- how much of that do you think is related to cost inflation pressures that you and your competitors are facing?
Regarding your first question, to discussion or negotiation with Freenet. There are no discussions or negotiations ongoing. So there, we cannot give any further information or there is no negotiation ongoing to this issue.
Regarding your second question to the mobile market and the competition landscape we do not see any big changes in the prices. Our impression is that every player in the market is aiming for keeping the prices on a stable level. We do not see a big aggressive offers in the market, but we also do not see any changes that, for example, competitors are increasing the prices because of the inflation rate that we -- that we are currently seeing. So we would say more or less the same situation that we have seen in the last months quite stable.
We will now take our next question from Martin Hammerschmidt from Citi Group.
Yes. I have a couple of please. And the first one is -- I'm sorry I missed it in -- if I missed it in the presentation, if I think about the timing of the Capital Markets Day, and I think all major deals are signed. So what is still missing to present the network case to the market? And when can we expect that?
And the second one is, could you maybe share your initial thoughts on how we should see EBITDA in 2023 developing, at least directionally? Because if I think about the different building blocks. So you have all major infrastructure deals signed now. And I think the cost should start to kick in for the cost savings from the migration, they only really kick in, in, let's say, 2024, I think, it will be where most of it starts. So is it fair to assume that EBITDA should be rather stable versus 2022? [indiscernible] income consensus at given a growth of roughly EUR 20 million.
And maybe the last one is on the 800 megahertz. I mean you've seen the latest comments from [indiscernible] last month that seem quite supportive, both in [indiscernible], could you maybe share [indiscernible]?
Martin, let me step in first for the question when CMD. As management has indicated in the balance press conference in March already, we are pretty much aware about inviting for CMD in the second part of 2022. But we are not very open minded to indicate whether it is in the beginning of Q3 or beginning of Q4. You are right. We have discussed that once we have all the pieces together, we invite, but there are not all pieces together. There is still an ongoing negotiation, which we take advantage of and be aware that we are fully aware about necessarity to share more transparency and disclosure, but we are shy about giving a specific time line or even a calendar week.
For the other question, I hand over to Markus. Thank you.
Yes. Regarding your question to the EBITDA for the next 2 or 3 years, so that will be an information that we will give on the CMD. We can't give you an own indication for the next 2 or 3 years. So let us do it on the CMD to give transparency on how we see the development in the next year and 2 the rollout of the network.
Regarding your question to the 800 megahertz and that would [ Bundeskartellamt ] has communicated. So it's not allowed to us to comment that what [ Bundeskartellamt ] is giving us information in the market. We are on the same position that we have communicated in the first quarter. We are quite sure that [ Bundeskartellamt ] understood our point of view to this. Unfortunately, we do not expect any decision in this year that what [ Bundeskartellamt ] has communicated that a decision to the situation with the 800 megahertz will be made in 2023, not early.
If I can just quickly ask a follow-up on what Oliver just said, that you are still in negotiations. What kind of negotiations [indiscernible] consumer you still negotiating?
Martin. Oliver, again. Let me answer in that way. It took us more than 2.5 years, roughly 2.5 years only to agree a national roaming agreement with the support of the regulators. And from that point, it took us only 1 year to secure every contract with every of our partner network. And there is one missing. To indicate, I can only refer to that what is public. We all know how Cellnex is leading through their calls that they regard an opportunity with a new entry in the German market as a proper one, but that is having said from the peers in their respective calls.
Please understand that I don't want to hint -- to give every any hint or to rise any speculation about what we are missing. We are on a very good way. And otherwise, Markus has not outlined that we are able to cover the 50% much sooner than expected and, of course, much sooner than 2030. So be a bit patient, though, I have to ask kindly for a little bit of patience, and we can inform the market once we can come out with the final invitation. Thank you.
We will now take our next question from James Ratzer from New Street Research.
Oliver, Markus. Yes. So two outside questions from me, where you're going to appreciate the network update that you gave and the [indiscernible] commitment you're making around reaching 50% of households. I mean given the confidence you're showing now, I was wondering if you could share any updated thoughts on the percentage of your network traffic that you might be able to offload onto your own network in that situation, both if you have the current spectrum you have and also in the situation that you are able to get access to the 800 megahertz.
So our assumption is still that we will have traffic coverage in the range of 55% to 60% with the 800 megahertz spectrum, and that's still our assumption that we have for the case.
And Markus, what would that be if you weren't able to get the 800 megahertz, please?
This is no scenario where we are thinking about. At the moment, we are quite sure that we will get access to the 800 megahertz spectrum. And therefore, we believe in the traffic coverage that I have mentioned.
Okay. Interesting. And if we're talking spectrum, I mean, do you have any views at this stage on the upper 6 gigahertz spectrum? Is that something that's starting to appear on your radar screen at all?
James, this is Oliver again. Pardon me, but if we speak about spectrum, as Markus said, outlined, one can relate to comments of the peers where for the EUR 800 million and the EUR 2.4 million, which is up for auction and '24/'25. There is a gap in the opinions, the one and the peers are saying, of course, whatever comes up, 1&1, it is obvious they have to be included, and that is what we are focusing on. So your question about the 6, maybe that is something for the future.
We will now take our next question from [indiscerible] from Bank of America.
I have just two from my side. And the first one, maybe I have missed it during the presentation, but on the pacing of the cost for the network rollout throughout this year. So first, thanks for giving us a road map on the network plans ahead. But I just wondered if you could give any color on both the OpEx side as well as the CapEx side throughout 2022. Is it rather something for the second half of the next -- of this year or rather evenly distributed given that you're running currently quite below your full year guidance?
And then the second question, a little bit on your fixed wireless offer, which you're planning to launch this year before the mobile network -- before the mobile [ app ] is coming from 2023. Could you give an update on maybe the preparations and your market strategy for the segment? And to what extent do you expect an impact on consumer numbers and financials, probably not much in 2022, but in 2023?
Yes, thanks for the question. And to your first question, the OpEx as well as the CapEx are back-end loaded in this year. So we will see an increase in the second quarter, but the main spendings in CapEx and OpEx for the 5G network will be in the second half of this year. Will be -- the share, I would say, 70% to 80% will be spent in the second half year.
Regarding your question to the fixed/wireless access product. So we are currently in discussion. We have the main focus on realizing the technical issues or topics that we need to offer this product. And what exactly will be the prices in the areas where we'll start to launch, that's something that we will do in the next 2 quarters. So I think we can give more color in our half year press conference on that. And to tell you or to give you more information to the offer at the moment, it's too early for that.
We will now take our next question from Usman Ghazi from Bernberg.
I've got 2 questions, please. My first question was just looking at what Dish in the U.S. was seeing at their Capital Markets Day on the -- on OpenRAN and because the OpenRAN equipment was so much smaller, that they are able to, a, get a lower rental from the tower co because the wind load is significantly lower because it is obviously having less [indiscernible] on the tower.
So just wondering if you're seeing similar economics in your discussions with the German telcos where I mean the equipment you'll be putting on is a lot smaller, therefore, the rates that you're getting are significantly lower than the -- what is kind of public about the lease costs from telcos. So that was the first question.
The second question and also -- sorry, this link to that -- I mean, are you seeing that because you need less space on the towers that -- less space on the rooftops because your equipment is smaller, that the colocation opportunity is actually bigger than would otherwise be the case? That was kind of the first question.
The second question was just on wireless access. I mean in which areas will you choose to launch this product? Is it in cities or in areas where there's DSL? I mean how are you going to go by choosing where you're going to launch this service?
Yes. Thanks for your questions. Regarding the situation in the U.S. that you've explained. I do -- we do not have any information at the moment that we have here a comparable situation. So that's something that we, at the moment, not see something that we can check with our technical colleagues. And to compare, do we have here in Germany, a comparable situation as in the U.S. But at the moment, I can't give you an answer on that.
Regarding the areas where we would like to start with the FWA launch. It depends, of course, on the first 1,000 antennas that we have to build up. So we have in the obligations, a clear regulation in which part of Germany, we have to build up the 1,000 antennas. And then we have to look where are our customers located, how is the situation with the bandwidth that these customers have. And then we will go on with our marketing strategy. It will be a strategy where we have to look where are the antennas and how is the situation with, for example, DSL or FTTH coverage. And then we can decide where can we make good offers for FWA product.
Just a follow-up, sir.
Usman, let me step in, please. Because you have mentioned the Dish CMD. I think what one has to highlight is that what Dish did this quite well that the technology is proven. So it is not an overrun situation or an overrun problem they are facing. I think what the difference to our approach is we have a hybrid approach of 4G, 5G approach whilst they are starting with 5G stand-alone for us. And for them, it is a problem that currently, they have only that expensive Huawei hardware whilst our customers can work with their 4G enabled and 5G-enabled hardware.
The second point is our spectrum so far is not as symmetric the spectrum of Dish is. And the next point or one of the important points, we have secured a national roaming agreement with the support of the EU regulation, whilst it is pending still in the United States. So I think with our proven distribution channels, we thank we are not impacted by any negative gross read from the [ Dishes ] CMD.
Oliver, that's really helpful. So just to follow up on the fixed wireless access service comments. So is it that the fixed wireless service will be limited to these 1,000 antennas that you're building? Or are you going to broaden the service over time with -- as you are increasing coverage?
No, it's not just for the 1,000 antennas. That's just the starting situation at the end of this year. Of course, we will grow our marketing campaigns parallel to the growth of our network. So it's not just an offer which is limited on the 1,000 antennas.
We will now take a follow-up question from Ulrich Rathe from Jefferies.
Two quick questions. The first one is in fixed, I think, there was a comment on the fourth quarter call that you just don't want to put marketing budgets into legacy and your technology and you're waiting for proper fiber FTTH availability from Deutsche Telekom before sort of restarting this and ending the current small but still persistent customer losses. Could you comment on progress with that? I mean, in the first quarter, it was still negative at about the rates that we observed in the quarters of last year. So there's no slowdown yet. Could you comment on the rate at which fixed net adds might improve?
And then the second question is in the first quarter, given that you were facing this higher rate of disconnections, did you take countermeasures by marketing a little bit harder and maybe trying to grab a bit more customers in the acquisition -- on the acquisition side? Or did you simply see this as an externality that you got a weather and probably better not to disturb the market by pushing against it? That would be helpful.
Yes. Thanks for your questions. The -- to your first question, the plan currently is that we will start end of Q3, Q4 with a fiber campaign. So first impact out of the campaign, we will see earliest in the fourth quarter. The -- at the moment, we are doing some tests, and we are starting with the offer, but a campaign is planned for the second half year.
Regarding your second question, we have not been more aggressive in the first quarter to compensate that what happened on the leaving side. So we have been driving with the same CPO targets with the same prices in our campaigns. We saw a small positive impact on the discount side. But basically, in the first quarter, we have seen that what we have expected. And in summary, it was quite comparable with the situation that we have seen also in the first quarter of last year.
We will now take our next question from Adam Fox-Rumley from HSBC.
I have 2, please. One is a bit of a follow-up on that second one from [ O-RAN ] actually. If I look at the Access segment, you managed year-on-year, you've done EUR 27 million more service revenue and EUR 20 million more of comparable EBITDA. So I guess I'm just slightly curious to know what was going on with the cost base. I couldn't quite make it out from the slides that you were showing earlier, whether or not you maybe, in fact, cut back on some marketing in the first quarter. Or it seems like the kind of marginal profitability was very strong in the quarter.
And then my second question is on the state of the discussions with American Tower. Obviously, you announced the framework agreement. But I wonder if you're expecting to be able to give guidance about the kind of range of cell sites that might be on the table with those guys as you have done with Vantage already whether that's something that's achievable in the short term, whether we have to wait for the Capital Markets Day or maybe there's just -- you need to keep that more open ended towards the latter part of the project.
Yes. Regarding your first question. So in summary, we are very satisfied with that, with the development of the EBITDA and also the margin. There is not any extraordinary impact or effect in the first quarter. We have been able to realize some optimizations in the cost of sales. But basically, we are in a quite stable situation regarding margin and costs for smartphones. And we have also been very consequent in our offer. So we are aiming for getting a good customer value via the new contracts that we are generating. And in a result, we see that what we have seen in the first quarter, which is a strong EBITDA growth.
Regarding your second question to ATC, we have agreed with ATC that we will not mention any ranges for co-locations that we see at the moment because we are still in discussion with ATC about the opportunities and the challenges that we see. And after we finish the process, then we will be able to give a number in the market, how many sites do we see in this cooperation. That's something that we have agreed with ATC.
[Operator Instructions] We will now take our next question from -- a follow-up question from Martin Hammerschmidt from Citi Group.
On the questions like on the handset sales, we've seen Telefonica Deutsche [indiscernible] posting quite strong handset sale versus sales came down this quarter. How do you explain the discrepancy here? Is that a function of Telefonica and us pushing it more from what you can tell? Is that just phasing? Or are there any other factors to play here?
Yes. We have seen that Telefonica is pushing their bundle offers very strong at the moment. But what we see on the new customer side, we are in a stable as comparable numbers with the year before. What we see -- what we have seen in the first quarter is much lower demand out of our customer base. And that's something that we've seen 2 years ago also, and it depends on the campaigns that we have driven 2 years earlier.
And so it's not an impact in our opinion because of higher competition in the first quarter. It's more an issue which is coming out of our customer base. And the further impact is that what I've mentioned earlier, because of the delay in receiving smartphones from our vendors at the end of Q1, we've not been able to deliver all smartphones in the first quarter. So we have a certain number of smartphones that have been delivered in the second quarter. Even the contract with the customer has been signed in the first quarter. So that's our view on the situation so far.
We will now take our next question from Stephane Beyazian from ODDO.
I'll try with three. The first one is just to follow-up on Dish and their network presentation. The [indiscernible] that eventually they expect their network to allow them to move from competitive pricing to disruptive pricing. And they get some examples such as [indiscernible] in Italy. Obviously, Germany is a very different market and you're in a different position to Dish in the U.S. because I was just wondering whether there is anything you could comment about that.
The second thing is regarding the plan to cover much sooner than expected the population in Germany. I mean you have the consensus. I understand consensus of EUR 400 million CapEx and you know what is in consensus for OpEx for 5G. I understand that you want to wait for the CMD. So without being too specific, conceptually, if you go faster in your rollout, could that mean that you may have to spend a little more in the next 2, 3 years than what is currently expected?
And third question regarding -- is it possible just to remind me what possible prepayments you could do with Deutsche Telekom in your 2022 cash flows? I'm thinking about prepayment for broadband, obviously.
Stephane, it's Oliver again. Your question related to Dish and the network quality is low and the prices and the price disruptiveness. As far as -- I was on the call as well. And as far as I understood, is the management of this confident and the O-RAN architecture, but they were highlighting the issues about I think Usman has asked before, the national roaming agreement, which is still awaiting the Department of Justice approvals and the spectrum, which is not the very best.
And on the other side, I think, a very -- advantage on our side is our proven distribution and our entire customer ownership. So what is important from my side on Investor Relations is there are no concerns about the technology, about the O-RAN architecture, but they have other things they have to hold.
Yes. Regarding your question to the CapEx for the 5G network, the guidance that we gave for this year, the EUR 400 million. And we also gave an indication that the CapEx next year will be lower than the CapEx in this year because we have to spend in this year CapEx for building up the data centers, and this will be, let's say, a one-off to next year, we will have to spend CapEx for example, for antennas, but not in Cordatus again.
And the range or the guidance that we gave for the CapEx is including our plan that we will have the household coverage much earlier than 2030. So it means if we are much earlier than 2030, it will not lead to an increase in the CapEx guidance.
Regarding your question to the payment to Deutsche Telekom for our broadband access, it will be in the same range that we have paid in last year. So last year in 2021, it was approximately EUR 200 million. And in this year, it will be a bit lower, but in the range of the EUR 200 million.
There please be no further questions. At this time, I would like to turn the conference back to the host for any additional or closing remarks.
Yes. Thank you. It's Oliver again. Thank you for your time and for your interest. Yes, I want to say goodbye, and enjoy the upcoming call of our mother company, United Internet, and take care all the best for all of you until we meet or speak in person again. Thank you.