RomTelecom rules out the possibility of giving up its mobile telephony operator Cosmorom, in order to increase the efficiency of its operations. Moreover, RomTelecom has said it is determined to support the recovery of Cosmorom, into which it has fed hundreds of millions of dollars so far, yet to no avail.
In the first nine months of the year, Cosmorom posted net losses worth 41.9 million euros and operating revenues of 12.2 million euros. Furthermore, the company recorded operating losses before amortisation worth 21.9 million euros. Cosmorom had about 44,935 subscribers at the end of September and 50,266 customers of prepaid services.
"RomTelecom will not give up its investment in mobile telephony. On the contrary, the company is firm in its decision to support Cosmorom and determine a significant recovery of the company's activities. There are several options for concrete solutions and RomTelecom is looking into each and every one of them. We can state that any rumours regarding Cosmorom's closedown are entirely ungrounded," the company announced.
These statements were triggered by the declarations of the Romanian Communications minister Dan Nica, who said at the end of last week that the situation of the mobile telephony operator Cosmorom had had a powerful impact on the consolidated financial results logged by RomTelecom. According to the minister, the operator's closedown was one of the options considered.
"We are looking into a vast array of variants, starting with the extreme solution - closing down Cosmorom, and all the way to finding financing sources," minister Nica said.
The Communications minister says that Cosmorom's losses took a 30% bite out of RomTelecom's consolidated financial results. The telecoms operator is the only shareholder of Cosmorom.
Back in July, Panagiotis Kargados, then RomTelecom general manager, said that 150 million dollars would have to be forked out to the network of the mobile telephony operator by the end of 2003.
After taking over RomTelecom in 1994, Greece's OTE decided to branch off into a mobile telephony operator on the Romanian market. However, they had to deal with the two big operators, Orange and MobiFon (Connex).
Cosmorom could not compete with the two players, which jointly hold more than 95% of the market. This summer, the financial circles were abuzz with rumours on the sale of Cosmorom, possibly to the powerful telephony company Vodafone, one of the Connex shareholders. However, the rumours failed to become reality. On the other hand, certain Russian investors are said to be taking a very close look at Cosmorom.
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