The management boards of communications operators OTE of Greece and CosmOTE will hold an exceptional meeting in Bucharest this week to discuss the re-launching of mobile telephone operator Cosmorom, which they intend to make profitable within four years, as well as the listing of RomTelecom on the stock market.
The delegation from Athens will be led by OTE chairman Panagis Vourloumis. OTE is the majority stakeholder in RomTelecom and owns Cosmorom, through CosmOTE, its mobile telephony company.
Vourloumis took over the OTE management last May, at a time when the Greek company was in a difficult situation. Sources on the market say the OTE group has such a large presence in Bucharest because Romania has become a strategic country for the Greek group''s investments.
The sources also said the group intends to analyse the RomTelecom model more closely. RomTelecom, which has turned from a loss-making company to a profitable one over the last two years, switching its strategy along the way - from a focus on voice services upstaged by mobile telephony, to data and Internet services. RomTelecom reported a second-quarter net income of 57.6 million euros for 2005, 519% up on the same period last year, with cumulated gains since the beginning of the year coming to 103.7 million euros, 434% up on the first six months of 2004.
This June saw CosmOTE pay 120 million euros to gain control of Cosmorom, which had major problems in 2003. At the moment of takeover, Cosmoron''s debts of 200 million euros were paid off or cancelled. CosmOTE has 6.6 million customers in five Balkan countries and is trying to strengthen its regional presence by acquiring Cosmorom and retain its position as one of the top five mobile operators in Europe.
CosmOTE stands out in Greece, where it is the leading player despite a late arrival on the market, five years after rivals Vodafone and Telecom Italia SpA.
After taking over Cosmorom, which currently has less than 1% of the Romanian mobile market, CosmOTE reduced its financial forecasts, revising its 2005-2007 growth target downwards to 8-12%, from the initial target of 12-15%. The Romanian operation estimates it needs investments of around 400 million euros. victor@zf.ro
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