Telekom Austria expects tough 2010

11 Dec 2009

Telekom Austria group has released its expectations for the financial year 2010, predicting that the prevailing financial environment will continue to affect results. This environment is characterised by several negative external effects which will continue to threaten bottom line results, such as ongoing fixed-to-mobile substitution in Austria, continued price pressure in Telekom Austria’s major markets and the effect from regulatory-induced lower roaming prices as well as mobile termination rates in Austria, Bulgaria, Croatia and Slovenia. Furthermore, the introduction of taxes levied on selected mobile communication services in Croatia and the Republic of Serbia poses an additional burden.

Revenues for the financial year 2010 are expected to amount to roughly EUR4.7 billion (USD6.92 billion). The company has already initiated significant cost reduction programmes in both segments addressing both staff and non-staff related expenses to mitigate the impact from lower revenues. Including the expected cost savings, EBITDA should reach about EUR1.6 billion. Depending on the extent of investments for the migration to an all-IP based voice network in the Fixed Net segment, capital expenditures are forecasted to reach up to EUR800 million. This amount does not reflect a material roll out of glass fibre, which is not expected to start in 2010.