United Internet AG

XETRA:UTDI

Earnings Call Analysis

Earnings Call Transcript 2024-Q3

[Operator]

Good day, and thank you for standing by. Welcome to the United Internet Quarterly Statement Q3 2024 Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Dominic Grossman, Head of Investor Relations. Please go ahead, sir.

[Dominic Grossman, executive]

Thank you, operator. Hello, and good morning, everybody. I would like to welcome you to our Q3 2024 Analyst Investor Call. Thank you for joining us today. My name is Dominic Grossman. I'm responsible for Investor Relations at United Internet. And here with me today, I have our CFO, Ralf Hartings.

Briefly about today's program. Ralf will first take you through our presentation with the business development in the first 9 months and will also give an outlook for the rest of the year. Afterwards, we will be happy to answer all your questions.

So far from my side, I would now like to hand over to Ralf. Ralf, please go ahead. The floor is yours.

[Ralf Hartings, executive]

Thank you, Dominic, and also a warm welcome from my side to our webcast on our 9 months figures 2024. Let's get into our numbers.

On Slide 2, we have summarized our major KPIs for you. Our customer contracts increased by 420,000 to 28,870 million in the first 9 months of 2024. Our revenue increased by 2% to EUR 4.660 billion. EBITDA decreased by 1.4% to EUR 978 million. However, it is important to note here that we have already invested more than EUR 160 million in the rollout of our 5G mobile network in the first 9 months of '24.

Our EBIT declined by 11.2% to around EUR 530 million. The decline in EBIT is driven by higher depreciation and amortization as a result of investments in the rollout of our fiber optic network at 1&1 Versatel and the rollout of the 1&1 mobile network. This increase in depreciation and amortization is to be offset by gradually increasing cost savings from this year onwards. EPS decreased from EUR 1.22 to EUR 0.82. This was due to our reduced EBIT, minus EUR 0.26, and the increased interest payments equaling to negative EUR 0.14.

I will continue on Slide 3. Let's have a look at our segments, starting with Consumer Access. Going to Page 4. In this segment, we have increased our contract portfolio by a total of 90,000 contracts to 16,350,00 year-to-date. Mobile Internet contracts increased by 130,000 to 12,380,000, while broadband lines remained broadly stable being just shy of 4 million.

On Page 5, revenue in the Consumer Access declined by 0.5% to EUR 3.017 billion. The decline in overall revenues is attributable to the decrease in hardware sales as service revenue increased by plus 2.5% to nearly EUR 2.479 billion. Hardware sales, especially smartphones, are subject to seasonal effects and are also heavily dependent on the popularity of new devices and the model cycles of hardware manufacturers. This effect may therefore be reversed in the coming quarters. The lower hardware sales have, in any case, only a very minor impact on the results. The high-margin service sales, which represent the core business of the segment, increased year-over-year, which is our focus area.

Going to Page 6. EBITDA in the Consumer Access segment decreased by 9.4% to EUR 463 million. The decrease in EBITDA in the existing core business is driven by the higher costs for the rollout of the 1&1 mobile network as the breakdown on the next slide shows. The Access subsegment increased its EBITDA by 7.7% to around EUR 630 million, while costs for the rollout of the mobile network -- 1&1 mobile network subsegment rose by more than EUR 93 million in absolute terms.

Switching over to Slide 8, let's have a look at Business Access. We were able to increase sales here by 4.2% to around EUR 430 million. On Slide #9, EBITDA in the segment increased by 2% to EUR 120 million. The high-quality expansion of our own fiber optics had a positive effect on EBITDA development as expected despite the start-up losses from the new business areas, 5G and expansion of business parks at 1&1 Versatel. Looking at our core business, EBITDA grew by 5.4% in the first 9 months of 2024. Our EBITDA margin remains broadly stable at around 28%.

Let us now turn to the Applications segment, and I'll continue on Slide 11. Accounts in the Consumer Application decreased by roughly 1 million from December 31, 2023 to 41,660,000. The decline resulted from a 1.25 million decrease in free accounts due to seasonal factors and higher security requirements, while pay accounts, i.e., paid contracts, increased by 180,000 to nearly 3 million now.

On Slide 12, we are looking at revenues in the segment. We've increased sales by 11.8% to EUR 218 million in the first 9 months, mainly driven by our growth in paid contracts as well as a slight positive development in the advertising market. Our EBITDA increased also by 11.8% to EUR 78.9 million. As explained before, we had invested some of our top line accretion into future growth of existing and new data-driven business models.

On Page 14, Business Applications segment, we increased our contract portfolio by 150,000 contracts to 9.54 million. The increase came to a large share from our operations abroad. Total revenue in this segment increased by 7.8%. The increase was driven from growth in web presence and productivity plus cloud solutions, which combined grew by 11.3%. Year-over-year, our total revenues grew by 11% in Q3.

On Page 16, EBITDA in the Business Applications segment increased by 9.1% compared to the same 9 months of the prior year to over EUR 320 million. The EBITDA margin rose accordingly from 27.7% to 28.1%.

So much for our segments. On Page 17, we have summarized the most important KPIs for the group once again and added a few more. We've already talked about revenue and EBITDA. Our CapEx amounted to EUR 442 million after EUR 460 million in the previous year for the investments in our fiber optics network at 1&1 Versatel and the rollout of 1&1 mobile network. As you can see, CapEx investments have a slight decrease compared to the same period of the prior year. However, this is mainly a phasing effect as we are expecting a very significant proportion of our annual CapEx in Q4.

I will provide a detailed breakdown of free cash flow on the next slide. Our net liabilities to banks increased by 11.4% to over EUR 2.7 billion. Our equity ratio reduced by 1.9 percentage points.

Going to Page #18. Here, we have our bridge from EBITDA to free cash flow. Largest items here are our net CapEx of approximately EUR 440 million as a result of investments in the network rollout. Furthermore, we had a cash outflow of EUR 260 million for our contingent payment, then phasing effects from Q4 2023 of around EUR 100 million and taxes of roughly EUR 200 million. Including working capital of EUR 68 million, this results in a free cash flow of EUR 39 million, respectively, negative EUR 64 million after leasing.

And finally, a brief word on the outlook, which you can find on Page 20. We specify our guidance for the fiscal year and expect an increase in revenues to approximately EUR 6.35 billion. Operating EBITDA guidance remains unchanged to approximately EUR 1.38 billion. As you may have heard in the webcast of 1&1 AG today, our guidance is subject to successful ongoing negotiations to compensate for the damages caused by the network outage.

CapEx, excluding any M&A transaction, is expected to increase by 15% to 25% over previous year's level, in particular, as a result of expansion into new business areas and for connecting mobile antennas.

We continue to remain optimistic about the future. Thanks to its predominantly subscription-based business model, United Internet believes it is well positioned to benefit from the investments made in recent years in customer relationships, new business fields and internationalization.

So much from our side, we are now available for any questions you may have. Thanks very much.

[Operator]

[Operator Instructions] And your first question comes from the line of Titus Krahn from Bank of America.

[Titus Krahn, analyst]

I got 3 questions, if I may. The first one is, for example, looking at your share price today, minus EUR 15 compared to [indiscernible] at minus EUR 7, looking at my screen, IONOS at minus EUR 5, it's quite clear that your conglomerate discount has widened quite a bit just today. Could you provide maybe an updated view on any changes you could foresee on the company structure, just looking at the results they had today, which kind of significant -- makes it much more significant how big your discount is compared to your sum of the parts?

Secondly, on the spectrum announcement that we'll probably hear in 2025, could you give any indication on when you expect to hear about the prolongation and to have a final result? And related to that, what that means to the timing of any potential use of the savings you could generate from not spending extra money on spectrum, but rather renting it and what that would mean to shareholder returns?

And maybe thirdly, just on the general political and macro environment that we currently experience in -- well, in Germany, do you see or foresee any macro impact on the advertising business in mail and media or the fiber demand in the business parks that you see with the current political uncertainty, a budget that is not yet ratified and with the current macroeconomic pressures?

[Ralf Hartings, executive]

Yes. Thanks, Titus, for your questions. So look, obviously, we have seen the share price development of today, but we are not tying our future strategy thinking to daily moves in share price. So I think, therefore, I don't think that there's any direct connect, even though I hear your argument, and obviously, we are considering things, but we will announce those if and when we feel like it's probably the right time for that.

With regards to spectrum, yes, you probably also have listened to 1&1's webcast. I mean there has been the court ruling from Cologne, which kind of puts everything up in a question mark, whether the original spectrum that we've acquired kind of was kind of -- was it really a legal process or not. Nobody knows. The Bundesnetzagentur has gone pretty quiet after that. We still don't know the explanation for the court ruling. And unfortunately, I also don't have a magic glass ball that can foresee the future, unfortunately. So I'm terribly sorry, but we'll have to just wait for the official authorities to come back with the next things to be announced. And I think you'll probably learn, and at the same time, we will.

And then unfortunately, to the last question you've had as well, I mean, I don't know whether there's going to be a significant impact to the advertising industry or not. I don't know if Germany will go into a recession or will recover. I don't know if maybe a new government, which I think I just read today is going to be elected on the 24th or 23rd of February, will change things and everything will be bloomy and rosy again comes a year time from now. I'm hopeful, obviously.

But the one thing I'm pretty certain of is the need for the services that we are offering in our core assets are so vital and essential to modern people's lives that I don't foresee any significant impact even though should the economy not maybe start booming again. Hopefully, that is a bit helpful.

[Operator]

Your next question comes from the line of Andrew Lee from Goldman Sachs.

[Andrew Lee, analyst]

Just had obviously lots of questions and answers already back and forth. But just wondered, you've spoken about the kind of near-term offsets you can make for the German pressures you're facing, so cost savings, et cetera. Do you think, however, that there's been a structural change in the market, partly driven by your network build strategy, partly driven by the shift in wholesale contract that means that we've now entered into a weaker growth outlook for yourselves when we talk about the top line and potentially for the market? That's question number one.

And then question number two, if that's the case, is there anything you can do about that? I know you referred to you're thinking about a few -- you're considering a few things, Ralf, but just wondered how you're thinking kind of structurally about ways that you can potentially impact the growth outlook of your business there?

[Ralf Hartings, executive]

Andrew, right. So you've -- I think in your first question, you're alluding to structural changes in the market because of our actions, i.e., building our own network and switching national roaming partner. I -- obviously, it's hard to tell if and when markets change. But to make a kind of a logical movement because we did this, then that market change, I'm struggling because we have been there before, we will be there thereafter. The only thing that is changing is that we are internalizing, as I've explained, I think, a few times in conversations before, external costs to internal costs, which is the key driver of our decision to build our own network.

And still, we've got good 12.5 million subscribers, and we clearly want to continue to grow those in the mobile segment, and that's not changed. I think your question would be more relevant if we would really be a new entrant into a market, and that's clearly -- that's not the case because new entrants, they obviously need to gain market share before they can start to become, I guess, more profitable. So I wouldn't say that there's a direct connection. And yes, I'm very hopeful that every player in the German market will start acting really rational. But obviously, I can't speak for any of our competitors.

And with regards to your second question, yes, again, no, I don't think that there is any, now is an inflection point to do things. I think, as I've also explained before, we like here in United Internet opportunities, and we like to be flexible. And therefore, we will continue that path and then start changing things when we think it's the right time.

[Operator]

Your next question comes from the line of Polo Tang from UBS.

[Polo Tang, analyst]

I have 3. The first question is just on IONOS. Can you give us your latest thoughts on a spin-off of IONOS? And what's the latest thinking in terms of any potential tax implications?

Second question is just really on free cash flow and use of cash. So how should we think about the trajectory of free cash flow going forward over the coming years? So for example, if things like the data center buildout of 1&1 is largely complete, if you have less of a drag from payment terms to Deutsche Telekom in terms of their broadband contract, can you see improving or positive free cash flow for United Internet in 2025? And if we get visibility in terms of the 800 megahertz spectrum allocation and there is no auction, how do you think about the range of possibilities for use of cash? And how do you think about the priorities?

And my third question is really just a bigger picture question in terms of the network build. When can investors start to see the benefit of the network build? And if you don't get access to low-band spectrum, would you limit your build to 25% population coverage rather than continue building to 50%?

[Ralf Hartings, executive]

Okay. Maybe I miscounted. I think I got 4 questions roughly, but maybe there was just one was -- anyway. I'll try to answer all as good as I can.

So with regards to IONOS spin-off, there are potential ways to spin IONOS off in a tax-efficient manner. It hasn't been done before in that form or fashion in Germany yet, but there are theoretically ways of doing so. And yes, that might be an option at some point in the future. But again, I'm not -- yes, again, I'm not changing what I've just said before to the other questions. I'm not going to change anything. I'm not stating anything.

And then with regards to free cash flow, no, I don't think we're going to see next year a positive free cash flow. We are still in the heavy investment phase. I think we've consistently communicated that also to the public. So next year is again a CapEx-heavy year. Yes, we will have less payments clearly for the contingent payment that's helping. But overall, still a great level of investment. So I can't foresee a positive free cash flow in 2025.

The years after, yes, things will certainly change. And then what to do? Let's see, right? I mean, obviously, we've levered the company higher, so we can probably start delevering and therefore, save interest again. We could also consider maybe doing a catch-up on the dividend, which had been a bit lower in the past years. I think as Mr. Dommermuth has also said that he would like that very much in one of the recent announcements we've had, but to be determined.

With regards to -- I think there was maybe the third, if there is not an auction for the low-band spectrum and we don't have a large cash out for that, what would I do with that money? Well, look, first of all, I need to have that money to spend it, right? So clearly, as we are on a negative cash flow and currently, as you know, we are increasing debt a little bit in the company, I probably need to less increase the debt because of that. And it will just help us to return to positive cash flows quicker. But I'm not saying that, oh, yes, this is great thing what I'm going to do with the kind of whatever [ 800 million, billion, 700, 500 ], I don't know. So I don't think I can kind of spend money that I kind of don't have it really.

And then the last one was if we would limit our rollout to 25% if we don't get low-band spectrum. Look, again, the Cologne court ruling did put at question the conditions of the spectrum that we've had acquired. Until I know what that means, I can also not say that we're going to change. Maybe we don't have any obligation anymore for 25% or 50%. Maybe the whole thing repeats, maybe we get a different condition. Anything, it's completely up in the air. So I'm not able.

Our plan A is to continue building our network. Our plan A is we are going to get low-band spectrum because, as you know, we need that in order to build an efficient network, which has got deep indoor coverage in dense urban areas, which is what we need. I don't care so much for the rural areas as we're not going to build there much. So yes, unfortunately, I can't give you much more clarity, Polo, at this point.

[Polo Tang, analyst]

Ralf, maybe just following up on the last question. When can investors start to see the benefit of a network build?

[Ralf Hartings, executive]

Yes. Look, obviously, I think 1&1 spoke about it, right? If we would have had converted more customers by now onto our -- migrated onto our network, investors would see that already today more. And unfortunately, we've had this outage and then the lowness. So clearly, in 2025, given the fact that 1&1 is back with, I think they've quoted 10,000 and they're going to increase to 30,000, 50,000 a day, each converted customer, as you also know, is straight saving because of the voice traffic, which is not anymore billed by the minute, but it's voice over data. So that's just a fraction and voice needs very little data.

And the second is every customer that is migrated and goes abroad, and Germans like to go on holidays to Spain and lots of places, we're going to save significant money on the fees we have to pay to other operators for international roaming due to our roaming deal with Orange with much more favorable conditions. So clearly, we will start to see that very soon in greater numbers.

[Operator]

Your next question comes from the line of Andrei Dragolici from Kepler Cheuvreux.

[Andrei Dragolici, analyst]

Just coming back on the contingent payment to Deutsche Telekom, I understand it's going to be lower next year. Would it be possible to quantify the expected payment for 2025? On the other side, how happy are you right now with the relationship with Vantage in terms of mobile site accesses? And how do you see it going forward?

And maybe a third one on customer acquisition in net adds in broadband. You had the ambition of stabilizing the base in 2024, but Q2 and Q3 are coming negative. How do you see your broadband business going forward?

[Ralf Hartings, executive]

So hang on, the first one, yes, sure, happy to give you a view on contingent payments. So as you know, it was like EUR 260 million this year. We expect something really mid-double-digit million, okay, which kind of means around the EUR 50 million or so, somewhere in that range from the year after -- from 2025 onwards.

Vantage relationship. Vantage is -- the Vantage relationship -- I mean, look, we've never had a bad relationship. They just didn't supply the sites that we wanted to have. And obviously, that has improved a lot. Vantage is still part of our future plan. Vantage is supplying a lot more sites than they did in the beginning. So I would say this is really on a good trajectory and on a good track.

And the last question was really on the broadband. We want it to stabilize. Yes, you're absolutely right. I think there is a dependency because the contingent contract with Deutsche Telekom is really that we kind of help them rolling out fiber to consumers and to homes. And obviously, depending on how quickly they can progress and that will then help us because we can wholesale on their infrastructure then. That was the whole idea of the contingent deal.

And so the more successful they are at acquiring new areas, the more successful we can be. And I think hopefully, we will see a good, nice stabilization and turnaround comes next year.

[Operator]

Your next question comes from the line of Adam Fox-Rumley from HSBC.

[Adam Rumley, analyst]

I've got a couple. The first one is whether you could just give us an update on how you're thinking about the investment into business parks with Versatel? Are you seeing -- on the back of the investments that have been made in recent quarters, are you seeing kind of take-up that keeps you satisfied that, that is the right place to deploy capital at the moment?

And then the second question was on the EBITDA guidance. And I'm sorry if this has been answered on a different call. I just -- I want to make sure I really understand what's being said. So if I got your comment correctly, Ralf, you said that the guidance includes some compensation, but on the [ 1&1 ninth ] call, they weren't willing to give any details of that compensation. I mean, I guess the question is how certain do you need to be that, that compensation payment is going to be paid in order to maintain your guidance, if that makes sense? What can we read into that?

[Ralf Hartings, executive]

On the business parks Versatel, yes, look, absolutely, we are happy with the investments we do there. We do track all these business parks very closely. We look at how each is developing in terms of adoption, in terms of penetration. And so far, I can say we're absolutely happy. As you know, Germany really is still heavily underinvested in fiber. And we do believe strongly that, in particular, putting more business in the connectivity with the fiber line, they're very loyal, very low churn, very happy customers.

Obviously, the future will demand more and more and more and more data and quicker. So therefore, we believe that our investments there are really solid and very meaningful. And I think I've mentioned that before. My boss, Mr. Dommermuth, he always says, young man, that's for retirement a little bit. So obviously, these are long-term investments. And after a certain number of years, they start to become really, really profitable and start to make a lot of fun. So we still believe that this is a good investment. But obviously, any investment decision is really carefully looked at. And sometimes we say yes, sometimes we say no to the one. So we just go to the ones that we believe that are really beneficial and pay back.

And now, a big disappointment for you. I'm not going to disclose anything more than what my colleagues did earlier because I'm just consolidating it up here, and that's kind of a 1&1 thing. And I do trust my colleagues fully that we've done the right thing here, but I can't disclose any more. So there is an element included, yes, and that's about it.

[Operator]

Your next question comes from the line of Joshua Mills from BNP Paribas.

[Joshua Mills, analyst]

I am actually going to come back to Adam's question because I think it is really important for us to understand this for next year as well as this year. I understand you're not going to talk about the specific amount, which you're including in the guidance for compensation. But could you just give us a bit of a detail on how that should be accounted for in the split between the start-up costs and the underlying EBITDA?

The reasons I ask are that if I look at the plan for this year, you said you'd spend EUR 174 million on the start-up costs. You're already at EUR 167 million. I guess the implication is that you will be spending more than that over the course of this year were it not for this payback from the compensation claim. So just getting a sense of what the actual underlying spend on mobile network costs this year versus the EUR 174 million guidance would be very helpful.

And then secondly, on timing, there's only 1.5 months left of the year now. In the past, you've updated and revised guidance mid-December. And I think that's the point in time where you have to kind of close the books and make sure that you know what the number is going to be for full year. So are you confident that you're going to get a resolution on this compensation claim within the next month? And if not, is there a way in which you could resolve it next year, but potentially book it into 2024 numbers so you can keep the guidance in place? Because otherwise, it looks very challenging to hit the 54% EBITDA growth, which you're guiding for in Q4.

[Ralf Hartings, executive]

Okay, Josh. So look, you said how this works. And look, in the -- let me explain you the principle. In the 1&1 mobile network kind of subsegment that we talk about, this is the area which kind of build the network and then also generate clearly savings because of internalization and clearly savings from that -- we've got, as I've explained a minute ago, savings from voice traffic over LTE instead of minutes and all that stuff. So because that didn't happen quite yet, clearly, the costs look higher from their end. And therefore, if there is a compensation element, it will go against that, okay? So hopefully, that makes it more clear.

In terms of guidance into the network investment, I think the team has had -- 1&1 had issued a guidance. I don't think that this is going to be super different than what they've issued. But again, maybe you should have asked them a minute ago. But no, in all honesty, I think -- yes, I think that still holds in place.

And then the last part is, yes, look, I mean, we will know when we know and as you trust the 1&1 team that they have got a solid case that they have made where they've issued it in guidance. And therefore, I'm also just as comfortable, I guess.

[Joshua Mills, analyst]

Okay. So just to clarify, you're saying that regardless of what happens, the EUR 174 million of network investment is the right number and the compensation would go into the other mobile business. If that's the case, why is the phasing so different this year on mobile network costs? Because I think in Q4 2023, you spent about EUR 60 million. There's a EUR 60 million EBITDA drag in Q4, whereas this year, you're saying it's only going to be EUR 7 million. Is it simply due to the timing of the build? Or is it something with how you -- changing with how you account for the network expense? Because the phasing just looks very difficult to understand from our perspective, I suppose.

[Ralf Hartings, executive]

Yes. No, sorry, if I didn't explain this right. So the savings go also into the 1&1 5G subsegment, okay? So given the fact that they hadn't been able to realize as many savings is why the spend looks now higher because the offsetting savings weren't yet included to the extent that we wanted it to, obviously, in a smaller number because we clearly have got customers converted. So it's not going to the other segment, okay? So hopefully, that makes more sense now on the phasing.

[Operator]

[Operator Instructions] And your next question comes from the line of Simon Stippig from Warburg Research.

[Simon Stippig, analyst]

First one would be in regard to Consumer Applications. You have nice top line growth there. Translation to EBITDA is also quite good. I just wonder here because you mentioned your increased investments of the top line, profitability into the project you're currently having. So could you speak about a normalized margin on your segment here? And then also when do you think this project would actually be finished or finalized and what returns it would yield?

And the second one would be in regard to Business Access. Could you speak about your sources of growth year-over-year, especially in respect to the 1&1 Consumer Access segment?

And third one would be just one follow-up in regard to the migration. Is it possible that you quantify your savings you have per customer per annum? And would it be the right figure to assume that given your 5 months of delay, which would translate to 100 days and, let's say, 30,000 migration customers per day that this number would be actually 3 million higher?

[Ralf Hartings, executive]

Okay. Hi, Simon. So first of all, Consumer Applications, it's not just one project that we are investing. We've identified with Michael, who is our new CEO, a few areas of focus, of which clearly one is to continue to drive subscription revenues. So the team is working on making the subscription -- basically what you get the value from the subscription from a customer's point of view, even more valuable, i.e., putting some extras in, which then would make probably consumers' lives easier. And that's an area they are focusing on. So to give a bit more benefit for as to why should I actually pay like EUR 6 now a month for my e-mails. That's one area.

And the other area is to continue to really monetizing on all this data treasure, I guess, is the right word that we are sitting on to really start monetizing that by helping, therefore, i.e., advertising becoming more relevant, and therefore, you can increase the yield. So that's kind of the second key area of investment. And then there's a few other ones.

So -- and these are not huge numbers, okay? So I think this year, they've hired 30, 40 more developers. So if you know what the developer cost per year, kind of you can make a math a little bit yourself. We're not talking about massive numbers. So -- and given that anyway, the numbers aren't that great, a few millions kind of make percentage point-wise quickly a big difference. But yes, I wouldn't get too excited about exactly how much would be a normalized. I think it's kind of normalized with the investments we do because we think that's driving the future growth.

I'm not sure 100% got -- I need to look at Dominic, the second one, the Business Access and the 1&1. Can you maybe help me again, Simon, to get you a bit clearer?

[Simon Stippig, analyst]

Sure. And was in regard to Business Access Versatel, your sources of growth, especially -- so your source of growth year-over-year, especially in respect to 1&1, your Consumer Access segment.

[Ralf Hartings, executive]

Okay. Sorry, yes, I get you. So it's not the biggest part of the growth that we are seeing there. So the internal kind of from 1&1 is not the most significant. So the biggest growth is coming from the core business as well as the business parks. And then there is an element of 1&1. In the future, it will change because it will become bigger and bigger. But at this point in time, it's clearly not the most significant part of it at all.

And then you've asked for how much is it per customer -- per migrated customer savings. Honest to God, I can't give you a clear number for that as a per customer and then even per day or so. Happy if we'd follow up afterwards a little bit maybe with Dominic to see how we can help you to get your math a little a bit specified. But yes, I don't have a number at hand for you on this question, okay?

[Operator]

Your next question is from Andrei Dragolici from Kepler Cheuvreux.

[Andrei Dragolici, analyst]

Just a follow-up question. So if any compensation, if anything would come from your suppliers would go into the mobile network segment, supporting the EBITDA of the mobile network segment. This is related to savings. Maybe looking at the EBITDA guidance for the Access segment, this implies around 14% increase in Q4 for the service revenue at around 1% increase. So maybe there are some savings there or something, but could you maybe break down for us how the mechanics work for the Access segment?

[Ralf Hartings, executive]

Yes. So first of all, completely properly understood. So any compensation for damage claims would go against the mobile segment. And then I think Markus also alluded to it in the 1&1 call. So clearly, the team is looking at OpEx saving opportunities as well as in marketing, where to probably be more efficient and therefore, be able to save some. So that is benefiting clearly then the Access segment, not the mobile segment. So these are the key drivers overall, which then leads to the guidance.

[Operator]

There are currently no further questions. I will hand the call back for closing remarks.

[Dominic Grossman, executive]

Thank you, operator, and thank you, everyone, for attending our call today. Please do not hesitate to contact us for any follow-up questions. We wish you a nice day. Stay safe, and goodbye from Montabaur.

[Operator]

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.