LATEST ECONOMIC BRIEFINGS
EMIRATES: DUBAI | 30.07.2010
Dubai’s capital markets appear to be in for significant change with plans unveiled to establish a second-tier stock exchange coming hot on the heels of Dubai Financial Market (DFM) – the government-administered domestic bourse – and the DIFC-based NASDAQ Dubai’s move to formally link their trading platforms. All of this is happening as speculation of a merger between the bourses of Dubai and Abu Dhabi mounts.
ALGERIE | 30.07.2010
Les efforts importants déployés par l’Algérie pour augmenter la production céréalière commencent à porter leurs fruits, dans la mesure où les récoltes record de l’année dernière et les rendements importants de 2010 aideront à réduire les coûts d’importation et à créer des emplois sûrs dans les zones rurales. Cependant, l’objectif de l’autonomie alimentaire fixé par le pays reste encore bien éloigné.
SENEGAL | 30.07.2010
Le Sénégal est en train de devenir un leader en matière de développement de l’énergie solaire comme énergie de l’avenir, et ce, à la fois à l’échelle nationale et continentale. Pour y parvenir, le pays veut augmenter l’utilisation des énergies renouvelables afin de surmonter ses propres manques et promouvoir un grand programme international ayant pour but de mettre fin à la dépendance de l’Afrique de l’Ouest à l’égard des combustibles fossiles.
BULGARIA | 30.07.2010
Though Bulgaria’s economy is likely to remain in the slow lane for the rest of this year, the country’s banking sector continues to show resilience in the face of global economic contraction. There are concerns, however, that increasing levels of bad loans carried by some lenders could add to pressures on the sector.
OMAN | 28.07.2010
A raft of new agreements recently signed by the Ministry of Transport and Communications will see a significant round of investment in Oman’s transport infrastructure. The 15 agreements, signed earlier in July, cover projects in land, sea and air infrastructure and are worth a total of OR136.9m ($355.9m).
COUNTRY COVERAGE
Telecom Troubles
Romania, Volume 36
28.11.2003
28.11.2003
With RomTelecom shareholders on tenterhooks awaiting a crucial meeting on the future of troubled mobile telephone company Cosmorom, Romania's telecoms sector grabbed many of the business headlines this week. Yet not all the sector's news was so troublesome, with an expansion of services heralded elsewhere thanks to major new deals and promotions.
Since Greek telephony business OTE - the majority shareholder in RomTelecom - announced early October that it would cease all investments in Cosmorom, the company's GSM network, the future of both Romanian companies has been in doubt.
OTE's withdrawal from the loss making GSM operator had been on the cards since it took control of RomTelecom at the beginning of the year. RomTelecom still holds a fixed line monopoly in Romania, despite market deregulation back in January. However, its profits have been steadily falling despite this advantageous position. In the first half of 2003, the company reported revenues of EUR389.7m, down 18.9% from EUR480.7m in the same period in 2002.
RomTelecom officials complain that this is partly due to their monthly subscription fees being among the lowest in Europe. However, as an affective monopoly, the company has to receive permission from the Romanian telecommunications regulator ANRC to raise prices. An application for a 66% hike in monthly fees was flatly rejected by the ANRC in early November, with only a 10% rise authorized, given certain conditions. These were that the company must first facilitate the access of other operators to its network and reduce tariffs on long distance calls by a minimum of 10%.
This was hardly good news for the company as it prepared for an emergency shareholders meeting to discuss the future of Cosmorom. This mobile operator has never managed to make a real impact in the Romanian GSM market, which is dominated by Connex and Orange Romania, with a third outfit, Zapp, also in the running. With less than 50 000 subscribers by mid-2003 - after the subscriber base had shrunk 35% in 2002 - it has long looked in serious trouble. Cosmorom's operating revenues for the three months ended September 30, 2003 amounted to EUR2.3m, while net loss amounted to EUR7.4m.
Deciding what to do about this will be the main topic of the forthcoming shareholders meeting. Yet the answer most likely also lies in the future shape of RomTelecom itself. At present, the company is not looking good, as a recent website statement by the new company management points out.
"RomTelecom is in need of dramatic restructuring in terms of the way it does business, the tools it has and the processes by which it makes decisions and runs its day-to-day operations," the statement says, before providing some depressing figures. "RomTelecom's international inbound traffic decreased 18% between the 4th quarter of 2002 and the 1st quarter of 2003 and RomTelecom's international interconnect traffic decreased 63% during that same time period. On the domestic front, RomTelecom's fixed-to-mobile traffic decreased 20% from the 1st quarter 2002 compared to the 1st quarter of 2003."
Naturally, as a major stakeholder in RomTelecom, the government has also been taking a major interest in developments. Minister of Communications and Information Technology Dan Nica is in favour of selling Cosmorom on, or putting it into a more profitable partnership, rather than seeing it shut down completely.
Nica announced on November 25 that the RomTelecom shareholders' meeting would happen "very soon". However, he also added that he had not so far received a report on Cosmorom being prepared by Deutsche Bank, whom OTE had called in to audit the company.
The government wants to sell part of RomTelecom on the capital market next year, which requires Cosmorom's status being clarified as soon as possible.
"Cosmorom represents 40% of RomTelecom," Eugen Preotu, an official at Nica's ministry told Business Romania November 26. "We could sell it all, depending on investors' interest," he added, saying that an auditor could possibly be appointed next week.
There has also been some speculation over who might be interested in acquiring Cosmorom, with Telekom Austria a name that repeatedly crops up, given its recent disappointment in negotiations over Bulgaria's MobilTel.
Meanwhile, elsewhere in the telephony market, things were not looking quite so worrisome.
In Transylvania, mobile operator Connex launched a major expansion programme, involving some USD12m of investment over the next eight months. This comes on top of around USD100m invested this year so far.
"Connex is committed to increase its visibility in Transylvania by launching an ambitious long term-programme," company president Ted Lattimore told reporters end of November. This will include "network coverage expansion, special promotions and community support activities," he added.
Connex now has over 500 GSM stations in Transylvania and Banat, with 25-30% of its revenues coming from these areas. Lattimore also estimated that the number of Connex subscribers would reach 4m next year, with revenues increasing by 20-25%.
The company is also at an advanced stage of negotiations on an interconnection contract with future fixed line provider Astral Telecom, according to Bucharest Business Week. Astral closed a similar contract with Orange earlier this week, after signing an interconnection deal with RomTelecom five months ago.
All of which shows the Romanian telephony market gearing up for some more serious competition in the months ahead. This may be good news for Romanian consumers, as prices will likely fall. Yet much of this new activity may be at the expense of RomTelecom, as its fixed line monopoly becomes seriously challenged while it may also exit the mobile phone sector. Sobering thoughts for the shareholders, as they ponder the company's future in the days ahead.
Since Greek telephony business OTE - the majority shareholder in RomTelecom - announced early October that it would cease all investments in Cosmorom, the company's GSM network, the future of both Romanian companies has been in doubt.
OTE's withdrawal from the loss making GSM operator had been on the cards since it took control of RomTelecom at the beginning of the year. RomTelecom still holds a fixed line monopoly in Romania, despite market deregulation back in January. However, its profits have been steadily falling despite this advantageous position. In the first half of 2003, the company reported revenues of EUR389.7m, down 18.9% from EUR480.7m in the same period in 2002.
RomTelecom officials complain that this is partly due to their monthly subscription fees being among the lowest in Europe. However, as an affective monopoly, the company has to receive permission from the Romanian telecommunications regulator ANRC to raise prices. An application for a 66% hike in monthly fees was flatly rejected by the ANRC in early November, with only a 10% rise authorized, given certain conditions. These were that the company must first facilitate the access of other operators to its network and reduce tariffs on long distance calls by a minimum of 10%.
This was hardly good news for the company as it prepared for an emergency shareholders meeting to discuss the future of Cosmorom. This mobile operator has never managed to make a real impact in the Romanian GSM market, which is dominated by Connex and Orange Romania, with a third outfit, Zapp, also in the running. With less than 50 000 subscribers by mid-2003 - after the subscriber base had shrunk 35% in 2002 - it has long looked in serious trouble. Cosmorom's operating revenues for the three months ended September 30, 2003 amounted to EUR2.3m, while net loss amounted to EUR7.4m.
Deciding what to do about this will be the main topic of the forthcoming shareholders meeting. Yet the answer most likely also lies in the future shape of RomTelecom itself. At present, the company is not looking good, as a recent website statement by the new company management points out.
"RomTelecom is in need of dramatic restructuring in terms of the way it does business, the tools it has and the processes by which it makes decisions and runs its day-to-day operations," the statement says, before providing some depressing figures. "RomTelecom's international inbound traffic decreased 18% between the 4th quarter of 2002 and the 1st quarter of 2003 and RomTelecom's international interconnect traffic decreased 63% during that same time period. On the domestic front, RomTelecom's fixed-to-mobile traffic decreased 20% from the 1st quarter 2002 compared to the 1st quarter of 2003."
Naturally, as a major stakeholder in RomTelecom, the government has also been taking a major interest in developments. Minister of Communications and Information Technology Dan Nica is in favour of selling Cosmorom on, or putting it into a more profitable partnership, rather than seeing it shut down completely.
Nica announced on November 25 that the RomTelecom shareholders' meeting would happen "very soon". However, he also added that he had not so far received a report on Cosmorom being prepared by Deutsche Bank, whom OTE had called in to audit the company.
The government wants to sell part of RomTelecom on the capital market next year, which requires Cosmorom's status being clarified as soon as possible.
"Cosmorom represents 40% of RomTelecom," Eugen Preotu, an official at Nica's ministry told Business Romania November 26. "We could sell it all, depending on investors' interest," he added, saying that an auditor could possibly be appointed next week.
There has also been some speculation over who might be interested in acquiring Cosmorom, with Telekom Austria a name that repeatedly crops up, given its recent disappointment in negotiations over Bulgaria's MobilTel.
Meanwhile, elsewhere in the telephony market, things were not looking quite so worrisome.
In Transylvania, mobile operator Connex launched a major expansion programme, involving some USD12m of investment over the next eight months. This comes on top of around USD100m invested this year so far.
"Connex is committed to increase its visibility in Transylvania by launching an ambitious long term-programme," company president Ted Lattimore told reporters end of November. This will include "network coverage expansion, special promotions and community support activities," he added.
Connex now has over 500 GSM stations in Transylvania and Banat, with 25-30% of its revenues coming from these areas. Lattimore also estimated that the number of Connex subscribers would reach 4m next year, with revenues increasing by 20-25%.
The company is also at an advanced stage of negotiations on an interconnection contract with future fixed line provider Astral Telecom, according to Bucharest Business Week. Astral closed a similar contract with Orange earlier this week, after signing an interconnection deal with RomTelecom five months ago.
All of which shows the Romanian telephony market gearing up for some more serious competition in the months ahead. This may be good news for Romanian consumers, as prices will likely fall. Yet much of this new activity may be at the expense of RomTelecom, as its fixed line monopoly becomes seriously challenged while it may also exit the mobile phone sector. Sobering thoughts for the shareholders, as they ponder the company's future in the days ahead.
