Magyar Telekom expects 2010 sales may drop at the same rate as in 2009 as rising unemployment saps spending on telecommunications, CFO Thilo Kusch told Bloomberg in an interview.
The company needs a surge in sales over the Christmas period to meet its 2009 forecast of a 2% decline in revenue, Kusch told Bloomberg.
“We are expecting a similar decline for next year as we have for this year,” Kusch said. “It seems that the worst is still ahead of us and the recovery is more towards the end of next year.”
Magyar Telekom has started developing new sources of revenue, including through domestic acquisitions of information technology companies and by launching a satellite television business. The diversification is part of a multi-year plan to find engines of growth away from the “declining old industry” of voice, Kusch said.
“This is our challenge and it’s a mammoth task,” he said. “This will take three to five years and creates quite an uncertainty around the stock, something that no investor likes.”
By the end of this transformation, voice revenue will fall below 50% of total sales, while information technology and TV together may reach 20% of group revenue, Kusch said.
Until the company develops new revenue streams, it plans to continue providing “attractive” dividends to draw investors “even if our business should deteriorate further during this transitory period,” Kusch said.
Magyar Telekom may make international acquisitions in 2011 “at the earliest” as governments including Slovenia have scrapped telecom privatizations during the financial crisis. New tenders typically take 12 to 18 months from start to finish, Kusch said.
The company previously considered acquisitions in Ukraine, Slovenia, Bosnia and Kosovo. Magyar Telekom already has units in Montenegro and Macedonia. (MTI – Econews)