Hungary’s Magyar Telekom (MTel) is diversifying into the utilities services sector in a bid to shore up its business and retain existing customers amid the country’s steepest economic downturn for more than a decade. Under the scheme the Deutsche Telekom-backed telco will resell natural gas and electricity to its residential and business users, starting next month. An MTel statement read: ‘It is anticipated that participation in the retail electricity and gas market will enable Magyar Telekom to retain existing, and win new telecommunication customers with attractive energy offers.’
According to TeleGeography’s GlobalComms Database MTel reported a 19% year-on-year fall in fourth-quarter net income, on a drop in revenue and rising staff costs, and said it expects a further decline in profitability in the current fiscal year. With Hungary enduring its worst recession in nearly 20 years MTel’s net profit for 4Q09 contracted to HUF10.2 billion (USD51.7 million) in the period under review, down from HUF12.6 billion a year ago, and below market expectations of HUF12.9 billion in a poll conducted by portfolio.hu. For FY2009, MTel’s net income was HUF77.6 billion, down 16.5% year-on-year.