Telecoms operator RomTelecom has freed itself of the cash troubles it was facing over the last few years, the most recent of which being related to the Cosmorom situation.
On the back of improved profitability, RomTelecom is now launching a series of new investments in order to grow its business and prepare for floatation, James Hubley, RomTelecom"s CEO, told Ziarul Financiar in an exclusive interview.
RomTelecom requires around 400 million euros to upgrade its network and install new equipment, while CosmoRom also needs a similar amount. All the investments are planned over a period of three years, which the majority shareholder, Greek OTE Company, intends to provide "on its own".
Upgrading of RomTelecom"s network began last year and the second phase has already been completed, making the operator the largest high-speed Internet service provider in Romania. "The shareholders decided to reinvest all the 2004 dividends into renewing the network (...). All in all, 400 million euros will be invested in RomTelecom over three years in order to renew the network and allow us to provide new services," Hubley said.
He said he believed the improved financial situation meant the investments in the network and the development of the business were making sense. RomTelecom"s profits surged 356.4% in the first quarter of the year, compared with the same period last year, with revenues increasing 12%. The listing of the majority shareholder, OTE, on the New York Stock Exchange prevents the company from issuing forecasts for the regional development of its business.
The bulk of the 400 million euros in investment will be spent on the equipment needed for upgrading the operator"s voice and data network. RomTelecom recently entered into an agreement with, Cisco, the world"s leading manufacturer of this type of equipment, which could make RomTelecom the leading high-speed Internet service provider in Romania. Completion of the network upgrading in Bucharest cost the company more than 25 million euros alone.
At the same time the relaunch of mobile communications operator Cosmorom, in which RomTelecom still owns 30%, will require the further investment of around 400 million euros, a figure confirmed by the mobile operator"s officials. dan.dragomir@zf.ro
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