The govt's to-do list on communications

Under the governing program for 2013-2016, the Romanian executive pointed out the targets it has in mind, in alignment with the European Digital Agenda. These include expanding broadband to rural areas, e-Governing, inter-operability, cloud computing, R&D and social media.

(In picture: Dan Nica, minister of Communications)

The government’s agenda stipulates the implementation of cloud services at the level of public institutions by creating a centralized, scalable and dynamic platform that should offer quality IT services at low prices and at European security standards.

The executive also intends to promote modern mechanisms of e-commerce, m-commerce, m-wallet and near-field-communication (NFC) in alignment with European regulations, and the encouragement of merchants to use these channels.

Initiating R&D programs in IT&C, based on the needs of the industry and stimulating private investments in R&D is also a target.

As far as broadband is concerned, the executive proposes to improve the access to broadband of the population and firms in the rural areas, in order to close the digital divide. This includes setting up a law package that should encourage the development of broadband infrastructure as well as modernizing the broadband NGA-FTTH networks.

Shaping digital competences among the population, with an emphasis on certain disadvantaged categories such as the elderly or those with disabilities, is also listed as priority.

In addition, the Ministry of Communications, which controls 46 percent of the Romtelecom shares, must clarify the situation of the potential Romtelecom- Cosmote merger or listing of Romtelecom on the stock exchange. Procedures started in mid 2012: Romtelecom selected Morgan Stanley to evaluate the benefits of the merger or the stock exchange listing versus other viable options. Stoica&Asociatii law firm was selected as an independent consultant to carry out the evaluation of shareholder options regarding the listing of Romtelecom at the BSE. However, after that procedures stalled, probably also as a result of the political instability in the country and decisions made by OTE and Deutsche Telekom, main shareholders in Romtelecom.

Read below a short BR interview with Stefanos Theocharopoulos, CEO Cosmote Romania and GM of Romtelecom.

Rep: What kind of offers will Cosmote launch on 4G?

Our network is already ready. Because we were the last in the market on the 3G, although this was a handicap in the beginning, it was also an advantage because we purchased the equipment with the newest technology. We are already pretty close to 4G even today, because we just launched internet speeds of 43.2 Mbps in 74 cities. When the spectrum is released, we are ready. We have specific offers for 4G both for the business and residential market which will include tablets and everything. So we have a complete portfolio which we will announce next year.

Rep: In relation to the high-speed internet, did this depend on the license?

This launch did not have to do with the licenses we have just won. It had to do with the technology and our state of art equipment, which has the highest speed capabilities of 3G and which is now LTE ready.

Rep: What can you say about the Romtelecom listing and potential merger with Cosmote?

This is a very big project. We have done the first evaluation. There are many details on the technical and financial side to be discussed and we have to take very careful steps because this is the project that will create the number one operator in Romania, in case the merger between Romtelecom and Cosmote takes place. It takes a little bit longer than it was originally planned. I cannot tell you a specific timeframe because we have to discuss again with our partners and set specific dates for the completion of the project.

Rep: What is OTE and Deutsche Telekom’s position on this?

The position has been clear from the beginning: they would like to see all the operations consolidated in order to create the number one operator in Romania. But no decision has been made so far on whether a merger will take place.

Rep: How much will you be impacted by the drop in termination rates?

It is very difficult to do calculations on that. We will definitely have an impact on our revenues and also on our EBITDA especially with the incoming traffic from abroad.

Rep: What will Romtelecom’s future strategy be focused upon?

As TV is the main priority of Romtelecom, we provide it also as OTT service via dolcetv.ro portal and Dolce Mobile TV application, powered by Cosmote Romania, and which became available since the end of July, this year.

Since the launch of the mobile application, it was downloaded by over 176,000 Cosmote customers out of which approx. 56,000 for iOS and over 121,000 for Android.

Regarding the technologies in Romtelecom portfolio to provide TV services, cable completes the company’s offerings with a mass product. At this moment is available in several cities in the country and it was very well received by the customers.

On the business market, the trend of the demand for the corporate segment is to ask for customized solutions, while the GBM customers need packages of services, including voice, fixed and mobile, internet and data, fixed and mobile, as well as equipment.

Romtelecom is market leader for managed services segment, having more than 22,000 workstations and equipment managed around the country. Also, it expanded its expertise towards services like BPO, payment infrastructure (POS) setup, managed operations and cloud computing. The latter one is one of the most promising business areas for the future, we are focusing on it.

Otilia Haraga

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