ECONOMY

Telecoms hit hard by crisis, levy

A recently introduced tax hike on mobile phone charges is likely to cause a drop in sector revenues of up to 8 percent this year, putting further pressure on mobile phone companies to cuts costs by trimming labor expenses. In June, the Economy and Finance Ministry announced a series of tax hikes, including upping charges on mobile phone users depending on the size of the bill, in a bid to support sagging budget revenues. «The impact from the new taxes has yet to make its mark on the market,» said an industry source, adding that it is likely to lead to a revenue drop of between 6 to 8 percent. The impact is expected to be heaviest on users that run up larger-sized bills, which normally belong to company accounts, at a time when businesses are looking at trimming operating costs due to the economic downturn. Cosmote Chief Executive Officer Michael Tsamaz said he expects turnover in the sector to drop by 12 percent, on account of the broader market conditions, which translates into a revenue drop of between 400 to 500 million euros per year. Meanwhile, the crisis appears to be having a big impact on Wind Hellas. The company has started procedures to restructure its debt and reduce it to 2 billion euros from 3.2 billion euros currently. Senior industry sources said the mobile phone company is likely to seek a capital injection in order to help fund development of its high technology networks and growth plans in fixed telephony.