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Bucharest (pte051/10.02.2003/20:57) - OTE Telecom, the Greek majority shareholder in Romanian telecom incumbent Romtelecom, recently announced plans for the financial rehabilitation of the telco, without the inclusion of Cosmorom, its mobile telephony arm. http://www.romtelecom.ro/
"With respect to Cosmorom, OTE will no longer provide financial support to this alternative communications operator and is currently looking into several options for the future, options that include Cosmorom's full sale to a third party," said Iordanis Aivazis, executive vice-president of OTE International.
He added that Cosmorom is currently operating at a loss, with debts estimated at E172m. He also expressed serious doubts that a full sale would generate total recovery of the losses.
Analysts say the current negative outlook at Cosmorom is due to insufficient investments in the company. The company appeared to have entered the market too late. Another cause lay in the fact that Cosmorom, as an operator, doesn't benefit from national coverage of its services, thus being unable to compete with the other two mobile operators on the market, Orange and MobiFon.
In the first nine months of 2002, Cosmorom recorded E41.9m in net losses and only E12.2m in operational income. The operator also reported EBITDA losses of E21.9m. By September,
2002, Cosmorom had only around 45,000 subscribers and some 50,000 users of pre-paid services. At the same time, Cosmorom's competitors each had equal an estimated 2.5 million customers.
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