21.12.2007.
| Sindikat Telekoma "Srbija" SO MG Smederevo | |
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21.12.2007. |
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Greek telecommunications group OTE has sent one of its top executives, Georgios Ioannidis to Bucharest, to take the reins of Romtelecom. The Romanian fixed telephony operator is now scrambling to adjust its strategy to be able to cope with the tremendous pressure from the Romanian mobile telephony and cable operators.
Romtelecom's number of customers is dwindling fast, even faster than estimated, so that it needs to find other avenues for development.
Ioannidis, 56, the chief technical officer of OTE, and also the chief executive officer of the Internet and Data division, OTE Net, will take over the chief executive position of Romtelecom from American James Hubley, sources on the market say.
Romtelecom is one of the most powerful companies in Romania, ranking seventh in terms of turnover and fifth in terms of profit. Any decision made here reverberates throughout the entire economy.
Hubley's departure comes after the departure of RomTelecom's chief commercial officer, Dutch Pieter Bakker. The two had been a team since 2003 when they were brought in by OTE to run Romtelecom, after the former Greek executives between 1999-2003 had spent hundreds of millions of euros with no clear development strategy in mind. OTE took the reins of Romtelecom at the end of 1998, following the privatisation process of this company.
Romtelecom would not comment on these management changes for the time being.
Georgios Ioannidis is quite familiar with Romtelecom's woes, as he has been on the Board of Directors since July 2006. The quoted sources say Hubley's departure is most likely related to changes in the strategy of the Romanian operator, as talks about the Greek state's partial exit from OTE following a possible transaction are picking up speed.
One of OTE's problems in Bucharest is the lack of strategy co-ordination between Romtelecom and mobile telephony operator Cosmote. Although they have the same shareholder, and although competition on the domestic market has become extremely fierce, the two companies have yet to find those joint steps to provide mutual support, and the job of the new manager will most certainly be to try and bring the two companies as closer together as possible.
The serious erosion of revenues from fixed telephony is making Romtelecom focus more and more on other services, such as broadband Internet and data transmission, a move it began with significant investment in 2005. Romtelecom has invested 300 million euros in infrastructure and technologies over the last few years. The number of broadband Internet (ADSL) subscribers rose from 12,000 in 2005 to approximately 100,000 at the end of 2006.
Romtelecom also launched digital television services, Dolce, for which it has more than 140,000 requests. Romtelecom is also planning to launch the new generation of interactive television via the Internet (IPTV) next year.
The annual turnover of Romtelecom, where the state still owns 46%, revolves around 900 million euros. The final 2006 results have yet to be revealed. In 2005 Romtelecom posted 925 million euros in turnover and 237 million euros in EBITDA.