Greece’s third largest mobile operator TIM Hellas saw its operating revenues fall 5.5% year-on-year in the first three months of 2005 on the back of falling subscriber numbers. The cellco, which is in the midst of being sold by Italy’s TIM International to private equity funds Texas Pacific Group and Apax Partners Worldwide, finished March with 2.276 million users, down from 2.324 million at the end of 2004; 65% of customers were pre-paid. Total revenues for the quarter were EUR184.8 million, down from EUR195.7 million in the corresponding period of 2004, a decline which the company blamed on a substantial drop in interconnection revenues, namely a 24.5% cut in fixed-to-mobile tariffs and 19.3% in mobile-to-mobile prices year-on-year. Additionally, there was an 18% drop in outgoing traffic from a declining pre-paid customer base and a 9.6% fall in equipment sale revenues due to falling handset prices. Blended ARPU was stable over the year at EUR25.4, with a EUR1.7 fall in pre-paid ARPU cancelled out by a 3.6% rise from contract users.
TIM Hellas was the first company to introduce mobile services in Greece when it launched commercially in 1993 under the brand name TeleSTET, just days before its rival Vodafone. Its GSM network covered 99.3% of the country at the end of 2004. Although traditionally the majority of its customers have been pre-paid, TIM Hellas is attempting to shift its mix towards higher-spending corporate customers by using its B Best business contracts, and to high-end residential customers through its TelTIM Pro package. It has also demonstrated its desire to migrate users to new advanced high speed services.
In February 2005 Telecom Italia announced it was contemplating an exit from Greece and two months later an acquisition vehicle controlled by Texas Pacific Group and Apax Partners signed a conditional agreement with TIM International to buy its 80.87% interest in TIM Hellas for EUR1.114 billion. The deal, which is conditional upon it receiving the necessary approval from the regulatory and competition authorities, is expected to be completed by July 2005.