RomTelecom revenues down 7%; net loss of USD2.5 million

29 Nov 2007

RomTelecom’s operating revenues in the third quarter of 2007 fell by 7% compared to the same period in 2006, with OIBDA decreasing by 17.3% year-on-year, mainly as a result of the lower turnover. A 78.3% reduction in operating income, combined with forex losses, and a near-doubling of RomTelecom’s share in the loss of mobile operator Cosmote Romania compared to 3Q06, yielded a net loss of EUR1.7 million (USD2.5 million) in the quarter. Declines in PSTN subscriber lines and traffic, as well as wholesale and payphone revenues, together with lower tariffs introduced in 2Q07 for both voice and ADSL products, were only partly offset by the rapidly growing customer base for emerging services, namely broadband, business data and TV. The combination of mobile substitution and higher competition from fixed line alternative carriers affected the number of lines, which decreased by 16.9% year-on-year. Local telephony traffic was 17% lower in 3Q07 compared to 3Q06. On the plus side, the introduction of new fixed line packages in May 2007 contributed to significantly reduced churn, a higher rate of new additions month-on-month, and a recovery trend in usage per line. Specifically, PSTN gross additions in 3Q07 increased by 25% compared to the same period in the previous year. ADSL customers numbered 242,000 at the end of September 2007, up by around 189,000 in twelve months. Dolce, a DTH TV service launched in November 2006, saw 59,000 sign-ups during July-September 2007 to bring its customer total to 291,000.