Romanian Romtelecom sees 4% higher revenues in H1, but no growth for Cosmote

Romanian telecom company Romtelecom, which is majority controlled by Greek group OTE, increased its revenues by 4.1% in the first half of this year, to EUR 306.4 million. Cosmote Romania, which is also part of OTE group, saw no increase, with revenues stable at EUR 219.8 million for the same period, according to Ote’s half year report. Romtelecom, which is 54% owned by OTE and 46% by the Romanian state, is the one of the largest fixed line telephony provider in Romania. It also provides internet broadband services and cable and satellite TV services. Romtelecom’s revenues were up 0.7% in the second quarter, to EUR 149.7 million, despite a 5.3% drop in revenues from retail fixed services, its main business line. This was compensated by positive evolutions on the other business lines. “While voice revenues were down 12.0% in the quarter, television revenues were up 4%. Compared to the end of Q2’13, the total number of Romtelecom broadband customers was up 1.5% at June 30, 2014, reflecting organic subscriber acquisitions, while TV subscribers rose by 6.8% compared to Q2’13. Both of these developments represent significant advances in Romtelecom’s ability to defend its customer base despite intense competition. The urban footprint of cable TV continued to expand, allowing more households in major Romanian cities to gain access to Romtelecom’s TV offering,” said OTE in its report. Romtelecom had 2.19 million voice telephony lines, at the end of June 2014, more than 1.24 million broadband subscribers and 1.38 TV subscribers. The company had an operating profit before tax, interest, amortization and depreciation of EUR 81.9 million in the first half of the year, 14.4% higher than in the same period of 2013, but this was canceled by higher depreciation and amortization on its assets. Cosmote Romania is the third largest mobile carrier on the local market and is fully owned by Ote. The company had 8.8% lower revenues in the second quarter of the year, compared to Q2 2013, due to termination rate cuts implemented in April, which affected all mobile telecom companies on the market. “In Romanian mobile, the drop in service revenues during the quarter reflects the steep MTR reductions implemented in April 2014. Excluding the MTR impact, Cosmote Romania would have posted another quarter of revenue growth,” according to OTE's report. Cosmote Romania’s operational profit EBITDA declined by 14% in the second quarter, to EUR 25.9 million and by 3.3% for the first six months of the year, to EUR 52.6 million. Cosmote Romania’s total customer base stood at 6.0mn, of which 26.2% was postpaid. The number of business customers grew by 10.1% compared to Q2’13, reflecting the company’s targeted offers for professional users and synergies with Romtelecom in the B2B segment, according to Ote. German group Deutsche Telekom, OTE’s controlling shareholder, plans to merge Romtelecom and Cosmote. The first step is the operational integration of the two companies, which