Telecom timing
By Peggy Hollinger

FT
September 8 2005 03:00

With France Telecom midway through its ‚¬3bn rights issue, it
doesn’t seem quite the right moment for the Greek finance ministry to
put 10 per cent of OTE on the block. Sceptics might take this as a
sign that the steam is beginning to run out of the Hellenic telecom
group’s recovery, especially as the shares at ‚¬17 are trading
some way below its hoped for ‚¬20 target.

OTE has been something of a basket case, with stakes in mostly
loss-making fixed and mobile businesses in Romania, Albania,
Macedonia, Armenia, Bulgaria and Serbia.

But investment banker-turned-company doctor Panagis Vourloumis, who
took over as chief executive 15 months ago, seems to be prescribing
the right medicine. Declines in fixed-line revenues are slowing and he
is making good progress on cutting costs. The company is even planning
to float its majority-owned Rom Telecom, next year.

His strategy has been endorsed by a 30 per cent rise in the shares so
far this year. True, they have stalled recently amid fears over
administrative delays to job cuts. But it might be wrong to interpret
the government’s haste in selling as a sign that the recovery is
really stuttering. Far better to look at the parlous state of the
government’s own finances.

The government’s troubles could be good news for OTE’s new
investors. The company is finally beginning to look like a mainstream
operator and, while business in the Balkans is still unpredictable,
its prospects look a lot brighter.

From: Emil Lazarian | Ararat NewsPress