UPC Romania, the biggest provider of cable TV services on the domestic market, last year generated operating income of about 58 million euros, accounting for 42% of its 140 million euro revenues.
UPC Romania posted revenues worth 140 million euros last year, 26% more than in 2005. The EBITDA margin was 42% of the revenues.
"This is a good level, but we must also take into account the fact that we had 35m-euro investments in capital increases last year, which means this is not a big return to our shareholders," stated Richard Anderson, CEO with UPC Romania. He added that he did not see any danger of a decline in profit margins, though organic growth would be much slower.
Romania is the biggest CEE market for UPC, with 1.6 million customers (revenue generating units), ahead of Poland and Hungary.
This year, UPC has 40 million euros set aside for investments in the network and improving customer relationship systems.
UPC will also invest 2 million euros in the rebranding process announced on Monday. Romania is the second country that the US company is present in, after the Netherlands, to align to the new visual identity that has been modified in the entire Europe. The re-branding process is due for completion at the end of 2008. As a way to secure its current customer base, UPC introduced two fixed telephone call plans. The 18 and 32 RON plans include free unlimited calls to any fixed network in Romania, except during peak hours for the former and 24 hours a day for the latter.
Anderson stated he expected the services to be highly profitable for UPC. At present, the company has 65,000 customers using fixed telephony services, with company officials expecting the number of customers to double by the end of this year, as a result of the new offers.
Some market players view the moves made by Romtelecom and UPC Romania, of launching subscriptions including unlimited calls, as a natural evolution. "Romtelecom and UPC are pursuing different objectives in launching these packages, but both operators already own infrastructures in which they've invested money, so that any new (in UPC's case) or retained customer (in Romtelecom's case) will generate profit. Moreover, the cost of calls in their own networks is very low," stated a representative of a company operating on the domestic telecom market, in a conversation with Ziarul Financiar.
Richard Anderson, CEO of UPC Romania
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