Deutsche Telekom CEO, unhappy with results in Romania, as sales continue to decline

Telekom Romania, German group Deutsche Telekom’s local subsidiary, posted a 2.2% decline in revenues in the third quarter of this year, to EUR 253 million. The slight increase in the group’s mobile business (+2.1%) was cancelled by the fixed line operations, which had a 5.2% decline in sales. Telekom Romania’s operational profit EBITDA saw a 20% decline, to EUR 48.2 million, as both mobile (-4.3%) and fixed operations (-32%) were less profitable compared to the third quarter of last year. The results for the first nine months of this year were also lower compared to the same period of 2014. The group’s sales were down by more than 3%, to EUR 760 million, while the EBITDA was down by almost a quarter (22%), to EUR 152.5 million. The lower figures in Romania have not been well received at the group’s headquarters in Frankfurt. “On the portfolio side - there's the Netherlands, the second one is Romania, and the third one is our Poland activities where we are not happy with the performance,” Deutsche Telekom CEO Tim Hoettges told analysts in a call, according to Reuters. A spokesman said this did not necessarily mean Deutsche Telekom was considering disposing of these assets. Deutsche Telekom, which controls Telekom Romania (actually two legal entities: Telekom Romania Communications and Telekom Romania Mobile Communications) via the Greek group OTE, only launched its “T” brand in Romania in September 2014. It was then that the group’s two local companies started selling combined fixed-mobile service packages. Telekom Romania reached 160,000 clients of converged services at the end of September, after adding 10,000 new clients in September alone. Overall, however, the group lost clients in the 12 months ended September 2015 on three of its four business segments - mobile subscribers (-2.9%), fixed broadband internet (-2.9%), and fixed voice services (-0.2%) - and only gained more TV subscribers (+2.5%). The Romanian telecom market is highly competitive and Telekom, despite being number one in terms of revenues, is not a market leader on any of the big segments. On mobile services, it ranks third, after Orange and Vodafone, while on fixed internet and TV it is second after local group RCS&RDS. Deutsche Telekom launches Magenta One packages in Romania – how are prices compared to Germany? Telekom Romania will invest EUR 160 mln this year in network upgrade Deutsche Telekom’s business in Romania declines after rebranding editor@romania-insider.com