The banking group issued a forecast for the income of the OTE Group, Greece’s main telephone operator and Romtelecom’s majority shareholder, of 54 percent for last year and for the coming four years, with direct references to the telecommunications company in Romania. Citi estimates that Romtelecom’s income will continue to drop, to €826 mln, its lowest level, down to €818 mln in 2009. According to Citi, the telecom operator could make a visible comeback in 2010, at €827 mln, and up again close to the 2007 figure in 2011, to €846 mln. Citi’s prognosis for EBITDA is similar.

The reasons for this downward trend are evident. Romtelecom’s present General Manager, Yorgos Ioannidis, came to Romania with a mandate to halt the company’s loss of fixed telephone clients and redress its business, both in terms of core business (telephony), and of ancillary services, such as Clicknet internet and the Dolce retransmission of satellite TV programs.

As such, the first public announcement made by Ioannidis in May 2007 was for a new subscription with unlimited calls in the network for a monthly RON 37, and a 50 percent drop of all fees for ADSL internet access. Subsequent announcements made the new manager’s strategy clear: halt the loss of residential subscribers, attracting new clients for internet services and satellite TV, and consolidation of the corporate segment, with 10 percent of the company’s telephone lines, which generates some 40 percent of revenue.

These very aggressive offers could not but impact on the company’s financial performance. Last year’s turnover and EBITDA dropped constantly, ending with an announcement of net losses worth €1.7 mln in the July-September period.

The client base has now been stabilized at over 3 million for voice services. Romtelecom has also announced its intention to reduce its personnel this year by up to 2,500 employees, or some 20 percent of the 12,300 it has at present.

Its main competitors for fixed telephony, internet and satellite TV are RCS&RDS and UPC Romania.