RomTelecom revenues down in 2006

Revenues of RomTelecom, the leading Romanian landline telecom operator, dropped by 3.8 per cent in 2006, to EUR 894.8M, primarily as a result of the fall in the landline numbers, while profits went down by 35 per cent, to EUR 55.2 M. However, the management estimates that the decrease will be made up for this year, thanks to revenues from the digital television and data services.

The downward trend in RomTelecom revenues reported last year carried on in Q4, when revenues went down 2.6 per cent to EUR 229.8 M, according to the quarterly financial report released Thursday by Greek group OTE, the owner of the company. The decrease was triggered both by the reduction in the number of landlines operated by RomTelecom, and by the decrease in traffic, both within the RomTelecom network and for calls from other companies’ networks.

The number of lines decreased by 14 per cent last year, from 3.95 million to 3.4 million.

The developments are blamed by OTE on the combined effects of customers’ shifting from landline to mobile telecom services and on the strengthening of competition with alternative operators, cable companies included. The decrease in revenues was partly made up for through the rebalancing of tariffs last August, OTE explains. Profits before interest, tax, depreciation and amortisation (EBITDA) amounted to EUR 338.3 M, as against EUR 341.5 M in 2005. “In 2006, RomTelecom achieved positive financial results, with EBITDA staying at approximately the same level as in the previous year. carrying on the investments launched over the past few years, with EUR 200 M invested in 2006 alone, RomTelecom is paving the way for substantially higher sales in 2007 for the ADLS internet and digital television services, with a view to replacing the revenues lost further to the decrease in the number of landline telecom customers,” says Yorgos Ioannidis (photo), RomTelecom executive manager.

The company’s long term debts decreased to EUR 105.1 M in late 2006, from EUR 148.4 M in December 2005.

The results have been calculated against international financial reporting norms. The number of employees was reduced by approx. 800 in 2006 (approx. six per cent of the total staff), to 12,257. OTE holds 54.01 per cent of the RomTelecom equity, with the Romanian State controlling the balance. RomTelecom holds 30 per cent in mobile operator Cosmote Romania, a subsidiary of Cosmote Greece, also a member of OTE group, and present in the landline telecom markets of Albania, Macedonia and Bulgaria.

RomTelecom invested EUR 15 M in the launch of a digital television service in late November 2006.

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