Telecommunications group Telekom Romania, part of Deutsche Telekom, announced it will invest EUR 160 million this year in upgrading its network. The company plans to double its fiber optics network in order to cover 2 million households by the end of 2016. It also plans to double its 4G coverage by the end of this year.

“In 2015, we will redirect the most important part of the forecasted investments, of over EUR 160 million, to the further roll-out of our network, to ensure technological leadership,” said Nikolai Beckers, CEO of the Telekom Romania operations.

“A part of this amount will come from the divestment of non-core assets, such as real estate and copper infrastructure which will generate capital to deliver this goal. In 2015, every meter of monetized old technology, such as copper, will be transformed into a new, modern one, such as FTTH (fiber to the home)”, he added.

Telekom Romania is the biggest integrated telecom group on the local market. Last year, the group’s two companies Telekom Romania Communications and Telekom Romania Mobile Communications had a total turnover of EUR 1.02 billion and a 30% market share, the group announced.

Telekom Romania ended the year with 2.23 million fixed voice customers, 1.23 million broadband internet customers, 1.41 million TV customers and 6.04 million mobile clients, of which almost 1.6 million had subscriptions.

German group Deutsche Telekom last year brought its “T” brand on the Romanian market. The group performed the largest rebranding in Romanian telecom, by replacing the two brands that it previously had on the local market, Romtelecom for fixed line services and Cosmote for mobile, with the Telekom brand. At the same time with this rebranding, which the group implemented in September 2014, it also launched integrated fixed-mobile packages.

Since the T launch and until the end of December 2014, Telekom Romania gained 46,000 fixed-mobile convergent (FMC) customers, 50% more than the company estimated.

“Integrated offers are the future in the telecom industry and we are best positioned to win the game. In brief, our fixed-mobile convergent services story is: all from one provider, delivering the best value, maximum convenience with a single bill and customer care and attractive handset offer,” Beckers explained.

“But we will not stop here: we will improve the processes, we will expand the handsets offer and we will make sure that the fixed-mobile customer will get the best and the fastest service in the call center. Soon, these customers will be served in the call center in less than 10 seconds”, he added.

Telekom Romania also increased its number of business customers in the mobile segment by 19% in the last quarter of last year, compared to the previous quarter.

The number of 4G mobile clients went up almost fourfold in Q4 compared to Q3.

However, the number of fixed broadband customers continued to decline. “In the past we were not fast enough to implement start of the art connections. This explains the flat performance of fixed internet services. This is also why we emphasize the need concentrate all our resources and invest in upgrading our network,” Nikolai Beckers said.

He added that Romtelecom will continue to divest its real estate assets, as these are not part of the company’s core business. “We are not a real estate company, we are a telecom company.”

Telekom Romania last year sold 28 assets for EUR 11.6 million. This year, the company estimates it will get another EUR 25-29 million from the disposal of properties, most of them belonging to the former Romtelecom.

However, the group couldn’t reach an agreement with the state, which is also a minority shareholder in the companies, to sell the Telephone Palace on Calea Victoriei, its most important real estate asset. The state has the right to submit the first bid for the office building, which has a historical value, as it’s one of Bucharest's landmark buildings. “The tender for the Telephone Palace expired and the matter will be discussed again by the company’s board of directors. It’s not a priority right now to sell it,” Beckers said.

Andrei Chirileasa, andrei@romania-insider.com