Tricom 'cautiously optimistic' following third consecutive quarter of growth

9 May 2005

Troubled Dominican Republic telecoms group Tricom has reported its third consecutive quarter of revenue growth and is ‘cautiously optimistic’ of its future. The company is currently in debt default after years of economic turbulence, but with the peso finally appreciating as part of wider macroeconomic stability it posted impressive double-digit growth and increased subscriber figures for the three months to the end of March. Operating revenues grew 26.9% year-on-year to USD55 million and net losses shrunk to USD19.2 million. The positive financials were driven by a 6.5% increase in fixed lines in service, up to 156,000, and a 15.6% leap in mobile subscribers, up to 320,000; cable subscriptions rose by 1.6% to 60,500.

Tricom launched in the Dominican Republic in 1992 and today offers local, long-distance and mobile telephony, as well as data transmission services including frame relay, VPNs, dedicated lines, dial-up internet and ADSL. Following a boom period spent expanding and acquiring rival businesses, the devaluation of the local currency against the US dollar meant the company limped through 2003 and 2004 battling against mounting losses. In October 2003 it suspended all payments on its unsecured borrowing and principal payments on its secured debt. It employed the services of Bear, Stearns & Co to formulate a restructuring plan, and elsewhere began discussions with strategic and financial investors regarding a possible sale or recapitalisation. In December of that year Tricom reached a preliminary agreement to secure a USD10 million loan from some of its existing creditors to provide essential liquidity for its short-term funding requirements. The following August all payments were stopped and Tricom entered debt default.

Dominican Republic, Tricom