Vodafone follows the downward telecom trend

The difficult economic context continues to affect the local telecom market, with Vodafone Romania, the second-largest mobile phone operator in terms of number of users, maintaining the downward trend registered in revenues from services, of 17.3 percent in the first fiscal quarter, which ended on 30 June.

Its main local rival, Orange, posted a 14.1 percent drop in the first three months of the year. "Our financial results reflect the impact of the economic situation, to which Vodafone is not immune, and regulatory decisions also went into effect in this period," the Chief Executive Officer of Vodafone Romania, Liliana Solomon, said.

The decline posted by Vodafone is due to a drop in user communication consumption and because of the decision by the National Authority for Management and Regulation in Communications (ANCOM) to cut interconnection tariffs, that went into effect at the beginning of this year, according to a fiscal report of the Vodafone group.

"The average revenue per user [ARP] declined compared to the same period in 2008, with our clients beginning to limit the consumption of communication services, due to the financial crisis and in order to have better control over costs," Solomon added.

On the other hand, Vodafone is gaining ground in terms of number of users, with a 5.2 percent increase in the first fiscal quarter, to 9,532,530 clients, compared to Orange, which posted the initial drop in its client base in the first three months of the year, of 237,000, to 10.1 million users.

While the top two operators in terms of number of users report drops in revenues, Cosmote Romania, the third-largest player on the market, registered growth in terms of revenues, of 84.2 percent in Q1 and in the number of clients, up to 6.1 million, and is preparing to attack the data segment, after taking over the Zapp network.

Business Standard