Telekom Austria braces for revenue fall

Telekom Austria’s chief says it will pump more cash into its network than any other telco in Europe over the next three years, despite the telco predicting a fall in earnings in 2011.
Hannes Ametsreiter told investors the firm will invest 16% of its revenues on its network between 2011 and 2013, assuring them it was in good shape to tackle “challenging market conditions,” and meet a 2011 dividend forecast increased by one Euro cent to €0.76.
However, CFO Hans Tschuden revealed the firm forecasts revenues no higher than €4.6 billion, down from an expected €4.7 billion in 2010 according to results to end-September, at a capital markets day on December 17.
Tschuden blamed “intrusive regulatory” cuts to roaming and interconnection rates for the lower sales figure, but said EBITDA is likely to be flat year-on-year at €1.6 billion.
Ametsreiter focused on the positives.
Revenues will be back to the predicted 2010 level within the next three years, as the firm’s investment in its fiber network begins to bear fruit, he said, adding that the firm’s high-speed broadband network has fuelled a “fixed net renaissance,” which has seen subscriber numbers growing for the first time in 12 years.
Additional investment of €800 million will be pumped into the telco’s domestic fixed and mobile infrastructure in 2011, as it pushes to achieve 55% coverage with its fiber network and deploy LTE by 2013.
The telco will also extend its convergence strategy to subsidiaries in eight Central and Eastern European countries.