TIM into fixed telecoms

TIM Hellas, the third mobile telephony network in Greece with a 20 percent market share, will invest about 400 million euros until 2007 and enter the fixed telephony market, too, CEO Socrates Kominakis told Kathimerini. He has been entrusted by the new ownership of TIM to turn around the company’s profile and figures. Quite unusually, the management is also participating in the company’s share capital. Kominakis promises that «TIM’s time has come» and customers will be offered a «new contract.» The Greek mobile telephony market is considered to be more than mature. What is TIM aiming at with its new owners? The market is mature indeed, but also presents considerable scope for growth, especially for TIM. We are focusing on the flexibility we now have to offer competitive products and services. The «key» to our new offers is «control of communication» through economical and «fair» services to our customers. With the same dynamic, we are continuing the expansion of our commercial network. By the year’s end, TIM shops will have reached 200 from 180 today. As you know, TIM Hellas is controlled by Troy GAC Telecommunications SA, a company set up by the APAX Partners and Texas Pacific Group investment funds. This is their first major investment in our country, but they are two of the biggest funds internationally, managing invested share capital of over 30 billion euros. They invest in many companies, several of which are in the telecoms and new technologies sector. Their aim is to develop TIM Hellas and definitely to create capital gains for their investment. Our strategy is therefore focused on strengthening our financial figures and on continuously increasing our profits. The way we choose to achieve this will be with an aggressive commercial policy and timely response to every move our competitors make. How do you assess the mobile telephony market this year, as well as TIM’s record? I believe this year, too, mobile telephony will be the engine of growth for the telecoms sector, although the market will not continue having the same growth rates as in the past. Specifically, overall revenues from services in the mobile telephony market will have a single-digit percentage growth. As for us, our recent efforts are vindicated by the figures, which show that the recovery plan we have been applying has already begun to bear fruit. For example, June was positive in terms of revenues, compared with the same month last year. The new products we have offered to consumers have also been warmly received. Notably, the new prepaid package F2G (free-to-go) exceeded 100,000 sales in its first five weeks. Is there any interest in expansion through acquisitions in Greece or elsewhere? Are you considering developing activities in fixed telephony as well? We already offer fixed telephony services to our corporate customers and by the end of the year, are planning to extend this to our private customers too. This is part of the strategy of providing complete communications services to our customers. We have the know-how, the technological infrastructure, the commercial network, as well as the customer support needed for us to provide fixed telephony services, creating, of course, some collaborations with TIM’s mobile telephony to the multiple benefit of the consumer. Why are you interested in Q-Telecom? Our shareholders should answer that. As the CEO of TIM Hellas, I believe we can develop significant collaborations if we cooperate at any level. I suppose you are aware that our shareholders are now in talks for Q-Telecom. By my reckoning, TIM’s change of ownership will lead to a further restructuring of the country’s mobile telephony market, attracting the interest of more funds. At present, Q-Telecom may be the first, if not the only, place where interest has focused. Do you foresee other developments in the telecoms market, and, if so, where? There will not be important developments, but there will be some restructuring. The market is quite saturated and I think that does not allow for new players. So, on this level, theoretically, there is no space. However, I believe there will be considerable volatility for the market’s balance, with mergers and acquisitions to take place. Companies themselves will seek to clear the picture. Just think that Greece is among the laggards in Internet penetration, 20th among the EU’s 25 member states. While in Europe, XDSL users reach 33.5 million, in Greece ADSL users are just about 5,000. For me, this is more than just a digital gap; it is a business opportunity. How do you see the changes in the regulatory authority? Do you agree with comments about an intervention by state telecom OTE in favor of a favorable authority toward it? I will not say anything about comments or rumors. I hope the new composition of the National Telecoms and Posts Commission (EETT), when it is announced, responds to the requirements of the market and its role. But I will tell you what I expect from the authority as a sector: Fewer interventions in the market by the committee, a lifting or a revision of the limitations and interventions that discourage competition and investment growth, as well as substantial talks with the market about crucial issues, particularly before taking regulatory measures. Can we expect a new spectacular dive in mobile telephony rates? We should not expect any spectacular dives. There have been considerable declines in recent years and there are no such conditions anymore as the rise in use balances out the drop in rates, which has reached its limit. What is your take on equipment cohabitation? We are in favor of the idea. Regarding base stations, it would reduce the aesthetic problems of which mobile companies are often accused. We have submitted more than 130 cohabitation applications for OTE buildings where CosmOTE has base stations. We have only received approval for one in Ioannina and implemented it. Let me note OTE’s denial of our cohabitation suggestions, which also translates into the loss of lease revenues for OTE. Have aerials really been blown up with dynamite and with gas canisters? Unfortunately, they have. We recently had four such strikes on companies’ antennas. Sadly, in 2005 there are efforts to demonize technology and the state does not promote awareness of the issue. Base station operation is not harmful, as has repeatedly been stated, so we invite people to seek more information. Even more worrying is that aerials have become an easy target for local politics ahead of next year’s municipal elections. The legal framework is unclear and complex and in business activity such a lack of clarity does not help. How come no one praises 3G anymore? Was it a big white elephant after all? No country has fulfilled the original expectations for 3G. Were third-generation licenses to be auctioned today, no company in Europe would pay the price it did 5-7 years ago. A great role in 3G growth will be played by consumers’ «training» in those services on which expectations had been built. This process takes time, though, so wait another 2-3 years to see more 3G users and revenues.

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