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Money News

T.Austria CFO says growth story over for telcos

Telekom Austria Chief Financial Officer Hans Tschuden seen before a news conference in Vienna in this February 24, 2010 file photo. REUTERS/Heinz-Peter Bader/Files

FRANKFURT (Reuters) - Telekom Austria’s finance chief said it was time for telecom companies to realise that the sector was no longer expanding even if individual regions would still show some growth, a newsletter reported.

“The entire telecom-industry has to bid farewell to the term growth story,” Hans Tschuden told Austrian newsletter Boerse Express in an interview published on Tuesday.

“Several markets such as India will continue to grow. But in all of Europe, including the East, this phase is over -- with a few exceptions,” Tschuden said.

Central and eastern Europe, which accounts for about a third of the company’s business, has been hit particularly hard by the global financial crisis.

Telekom Austria expects 2010 earnings before interest, tax, depreciation and amortisation (EBITDA) to fall 11 percent to 1.6 billion euros ($2.13 billion).

Tschuden reiterated he expects 2010 to be a difficult year and that he did not anticipate any signs of relief. Next year, however, could be a year of stabilisation, he added.

Tschuden also said that he was confident Telekom Austria would not run into problems reducing debt and paying a dividend.

“With 3.6 billion euros we are at a level of 2 times net debt/EBITDA, we are comfortable with that,” he said, adding he expected that level to remain stable in 2010 and improve in 2011.

Telekom Austria is due to report on its first-quarter earnings on May 12.

Reporting by Nicola Leske; Editing by Jon Loades-Carter

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