After the Finance and Justice Ministries' approval, the contract will be passed on to the government for endorsement.
Last year was RomTelecom's best financial year: $927 million sales and $233.7 million net profit, a historical maximum, or a 25% profit margin. In the meantime 2005 was also the first year when the company subscribers base decreased (by 380,000 to 3.958 million) mainly due to a too-much-delayed tariffs rebalancing process, while the company had at the same time a long waiting list - 275,000.
RomTelecom shares will be traded on Bucharest Stock Exchange, as well as on an international stock exchange this autumn. Market value could be between $2 billion and $2.5 billion, strongly influenced by the National Regulatory Authority for Communications (ANRC) decision to decrease interconnection tariffs prior to the company's listing, as well as by Cosmote Romania's performance.
In late 2005 RomTelecom had sued ANRC for decreasing interconnection tariffs at an improper moment: network digitalisation was not finished, the company IPO was in progress etc. Consequently, RomTelecom announced that investment in the next generation network, about $500 million, would be postponed until "the investment climate in
Pieter Bakker, Chief Commercial Officer of RomTelecom, has stated that the company would be interested in acquiring a WiMax licence to be auctioned late in 2006, to help the operator compensate for decreasing voice revenues by providing content services. To compete with altnets, which are already taking 10% of fixed telephony local users, RomTelecom has no other choice but to invest heavily in network: next generation network, WiMAX etc.
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