Greece's OTE Romanian Unit RomTelecom Turns to 9-mo Operating Income of 20.3 Mln Euro

In the third quarter alone, RomTelecom’s operating income jumped to 8.0 million euro from 1.7 million euro a year earlier, OTE said in a statement.

"In a country marked by political uncertainty and whose economy is projected to shrink by nearly 8% in 2009, RomTelecom achieved a respectable performance in the third quarter of 2009, containing the drop in revenues to only 6.2%," it said.

The third quarter’s revenue decline primarily reflected a 15% decrease in voice services, as a combined result of a 10% ARPU (average revenue per user) drop and a 5.6% line loss compared to a year earlier. Thanks to euro-denominated tariffs and 60% of revenues being generated by subscriptions, RomTelecom benefits from an effective buffer against currency devaluation and lower consumption, OTE said.

In January-September, RomTelecom's revenue fell by 7.2% to 609.4 million euro, while operating income before depreciation and amortisation (OIBDA) was 2.9% higher on the year at 201.9 million euro. The results were reported under the International Financial Reporting Standards (IFRS).

"RomTelecom's strategy aims at offsetting the drop in traditional telephony revenues through market share gains in new growth areas, such as broadband and satellite TV. The company’s objective is to increase the number of revenue-generating units, defined as PSTN, ADSL and TV subscriptions, to mitigate the effects of the drop in number of traditional voice-only customers," it added.

OTE also said it reduced its headcount by 3.0% to 10,206 employees at the end of September 2009.

"The newly launched very high speed VDSL Internet service attracted significant interest from customers in the 10 cities where it is offered. At the same time 90% of CDMA connections installed are providing mobile broadband to interested customers, showing the progress RomTelecom is doing in offsetting the decline in traditional telephony services with a new, rich and diverse offering to both its retail and business customers," it added.

The number of RomTelecom’s fixed lines fell by 5.6% on the year to 2.81 million at end-September.

OTE owns 54% of RomTelecom, and the Romanian government holds the balance.

OTE (Hellenic Telecommunications Organization) (www.ote.gr) is Greece's largest telecom group. It reported a net income of 434.5 million euro for the first nine months of this year, down by an annual 13.4%.

($ =0.6747 euro)