By Stelios Orphanides
Two Greek companies have submitted proposals to acquire CytaHellas, the loss-making subsidiary of state-owned telecom Cyta, put on sale to stop the blood-letting, although no decision has yet been made to proceed with either of them so far.
Still, a successful completion of the deal is unlikely to reverse the downward trend of Cyta’s market share on the domestic market which commenced in 2004.
Greece’s Vodafone-Panafon and Wind Hellas expressing their interest, the state-owned company said.
“The evaluation of the proposals is beginning immediately,” Cyta said in a statement on its website.
Cyta, which escaped privatisation early last year after Diko withdrew its support for the government’s plan to sell the company as provided in the cash-for-reforms agreement with international creditors, said that the process of exploring investor interest for its unit is within “the context of transparency and integrity” in cooperation with external consultants.
A Cyta source said in a telephone interview on Friday that while “the sale of CytaHellas is a priority for Cyta,” it remains unknown when the board meeting will decide on the two offers.
According to the Audit Office of the Republic, CytaHellas, owned 94.8 per cent by Cyta’s subsidiary DigiMed Communications Ltd and 5.2 per cent directly by Cyta, last year generated €18.9m in pre-tax losses compared to pre-tax losses of €3m in 2015 when its turnover fell to €90.8m from €107.8m respectively.
CytaHellas, established in 2007, has generated an accumulated loss of €165.3m. At the end of last year, it had 306,800 customers for its fixed-line services and 43,200 users of mobile telephony plus 5,995 subscribers of Cytavision.
Cyta invested via DigiMed a total of €194.5m, which is more than 1 per cent of Cyprus’s gross domestic product (GDP), in CytaHellas whose financial position in 2016 was minus €15.4m, according to the Audit Office.
In the financial year of April 2015 to March 2016, Vodafone-Panafon generated a net loss of €29.5m compared to a net loss of €126.7m in the financial year before, the company said on its website. The company could increase its turnover in the financial year of April 2015 to March 2016, to €843.3m from €738.1m in the financial year before.
According to the website of Wind Hellas, which contains no financial statements, the company has 4.5 million customers in the country in either mobile and fixed telephony.
According to Greece’s Kathimerini, OTE dominated the fixed-line telephony in the fourth quarter last year with 2.7 million subscribers, followed by Vodafone with 656,000, Forthnet with 564,000 and Wind Hellas with 558,000.
According to Greece’s Naftemporiki, Cosmote, OTE’s mobile phone unit had a 45.2 per cent market share in mobile telephony in Greece at the end of 2015. Vodafone’s share was 35.1 per cent and those of Wind Hellas and Cyta 19.5 per cent and 0.2 per cent respectively.