ECONOMY

Info-Quest sets its sights on mobile phone market

Aspiring telecoms operator and IT company Info-Quest said yesterday that it aims to capture a 5 percent share of the domestic mobile telephony market by 2004, a year and a half after the projected launch of fixed-wireless and mobile telephony services. Info-Quest signalled its determination to expand into the telecommunications market last year when subsidiary Quest Wireless acquired a fixed-wireless telephone license in January, followed by the parent company’s purchase of a mobile phone permit in August. Info-Quest President Theodoros Fessas said the company hopes to sign on 500,000 mobile phone subscribers, corresponding to a 5-percent market share, by 2004 and more than 4,000 corporate and professional clients for the fixed wireless services around the same time. He said the company will count on the quality of its services to wrest market share from the incumbent operators in both fields. Telecommunications activities are expected to generate more than 7 billion drachmas in profits by 2004. Total investments in both mobile and fixed-wireless services, including the costs of the two phone licenses, are estimated to rise to 27.5 billion drachmas by 2003. Referring to Info-Quest’s decision to venture into second-generation services at a time when other mobile operators are preparing to offer third-generation (3G) technology, Fessas said the new technology has yet to prove its commercial viability. 3G services are not yet developed nor can anyone predict how they will be. In Greece, the three incumbents over-paid for the licenses. The question now is how they will finance the construction of a network. The high costs could impact on their future profitability, he argued. Info-Quest also plans to inject 8.5 billion drachmas into satellite services subsidiary Unitel next year, enabling it to upgrade its range. The company hopes to be able to offer 150 TV stations, up from the current 20. Parent company Info-Quest expects revenues to exceed 100 billion drachmas this year, up 20 percent, but pretax profits to decline by 23 percent to 2 billion drachmas. Investment profits are projected to reach 5 billion drachmas. Consolidated revenues are estimated to increase by 24 percent to 145 million drachmas and pretax profits to slide by 45 percent to 2.2 billion drachmas. The projected sharp fall this year is due to restructuring charges, fixed-wireless outlay, delayed IT projects backed by European Union structural funds and the knock-on effect of the September 11 events. Presenting nine-month results, Fessas said that IT activities continued to account for the bulk of revenues. Revenues from this sector came to 80 billion drachmas, with pretax profits totaling 1.7 billion drachmas. Consolidated sales amounted to 99.8 billion drachmas and pretax profits, 5.6 billion drachmas. Fitch believes that the merger process will be particularly challenging, with the current unfavorable operating environment putting pressure on earnings, and both banks already involved in their own ongoing restructuring. A major task will be the rationalization of the branch network, implementation of a common IT system and the reduction of staff (which is limited by Greece’s strict labor laws and therefore can only occur via a voluntary exit scheme), but also the ability of the merging entity to keep ongoing business.