A decision about the future of CosmoRom, the mobile telephony division of RomTelecom, will be made by September 2003, Lefteris Antonacopoulos, chairman of Greek telecom group OTE said.
"RomTelecom's majority shareholder is now in talks with Greek telecommunications equipment provider Intracom and the lender banks to find a solution to CosmoRom's commercial debts," Antonacopoulos said.
OTE's shareholders are scheduled to convene for a general meeting on June 30 and primarily debate the future of the mobile telephony operator in Romania. #leadend#
OTE Group's chairman said once more that the Greek group had not ruled out any option considered for CosmoRom yet: either close it, sell it or conclude a partnership with other mobile telephony operators on the Romanian market. Antonacopoulos cared to mention that "in case OTE finds a solution for CosmoRom quickly, it cannot be turned into effect any sooner than the end of the year." He restated that OTE "was, is and will be most interested in the mobile telephony in SE Europe, and especially in Romania." "There are more than 20 million people in Romania, and the mobile telephony penetration rate reaches about 22%, compared with 60%-80% in the European Union countries. So that there's room enough on this market," the OTE Group chairman said.
Until now, CosmoRom has failed to make a name for itself on the market ruled by the other two powerful mobile telephony operators, Connex and Orange. The mobile telephony operator had 44,915 post-paid users by December 2002, 35.5% fewer than in the previous year, as well as 54,447 pre-paid card users, up 45% compared with the end of 2001. All in all, the number of CosmoRom customers saw a 7.3% drop in 2002 from 107,209 to 99,362. Also in 2002, CosmoRom posted 131.2 million euro net losses, while operating revenues were worth 15.4 million euros, as highlighted in OTE's annual report.
Standard & Poor's and Moody's have recently announced monitoring of OTE's ratings, as a result of CosmoRom's failure to pay an over 100 million euro commercial debt to Intracom.
OTE at that time reacted by saying it would no longer feed cash into the Romanian mobile telephony operator. The idea was mentioned again by George Skarpelis, OTE executive vice-president, who said, "it is obvious that RomTelecom, which needs to become even more competitive after the fixed telephony market deregulation, cannot possibly provide financial support to the mobile telephony division." Skarpelis, after all, deemed RomTelecom's results in the first quarter this year as "positive" in terms of EBITDA rate.
"Whereas this index had reached 23%-24% last year, it has come close to 30% in Q1. We're hoping to see RomTelecom's EBITDA rate at 31%-32% by yearend and therefore closer to the overall group indicator, 40%, which is one of the highest in the entire European telecommunications industry," Skarpelis said.
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