Telekom Austria reported a net loss of $401 million in the first half of 2014. The Vienna-based telecom, which is now controlled by billionaire Carlos Slim’s América Móvil, blamed the decline on economic problems in central and eastern Europe, regulatory problems and an accounting error.
Telekom Austria reported group revenue of $2.59 billion down 7.3% from the first half of 2013. Earnings before interest, taxes, depreciation and amortization was down 7.2% at $829.3 million.
CEO Hannes Ametsreiter said that the persistent economic crisis hit central and eastern European markets particularly hard in the first six months of the year. In addition to its home market of Austria, Telekom Austria also operates in Bulgaria, Croatia, Belarus, Slovenia, Serbia and Macedonia.
In Bulgaria, the company had to write down $535.5 million for Mobiltel. Ametsreiter noted that Bulgaria has been heavily impacted by not only the economic crisis but also by the nearby conflict in Ukraine.
“As one of the leading communications providers in Eastern Europe, Telekom Austria Group has not been immune to such negative developments,” said Ametsreiter in a statement.
In Austria, new accounting software discovered an overestimate of unbilled revenues in Austria, leading to a one-time adjustment of $64.2 million, against a net profit of $37.7 million. However, the operator remained upbeat about its performance in Austria, characterizing its performance as the successful implementation of its strategy.
Despite the problems this half, Ametsreiter looked forward to brighter horizons given the recent $1.3 billion cash infusion from Slim’s América Móvil. “Thanks to the strong partnership with América Móvil, we will be able to take important steps in the months to come to further develop Telekom Austria Group,” he said.
In July, the telecom brought its stake in Telekom Austria from 27% to more than half. The holding company for the Austrian government still holds a 28% stake in the company.
More telecom news from Europe:
U.K. customers report high satisfaction with mobile services. Alhough 30% of British mobile users have experienced problems such as blocked or dropped calls, the vast majority expressed satisfaction with their mobile networks, according to British telecom regulator Ofcom. However, that satisfaction wavers a bit according to location from a high of 78% in urban areas to a low of 67% in the more rural parts of the United Kingdom.
Swisscom now controls PublicGroupe. Switzerland’s national telecom announced that it has nearly 91% of the marketing solutions provider after making a successful offer of $514.5 million. Swisscom is particularly interested in PubliGroupe’s online directory platforms.
Swisscom also has a new spokes-singer: Tina Turner, who became a Swiss citizen last year, is the ambassador for the company’s IO communication app. In this video, Turner adds some Swiss embellishments to her personal history, including yodeling her song Simply the Best:
http://youtu.be/SKlVq-lh268
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