Faced with ever-increasing regulatory pressures and intense competition, GO is turning to non-core business while keeping track of its core business and promoting a leaner and competitive business model.
Speaking at a presentation of the half-yearly results and figures to the media and stockbrokers, Yiannos Michaelides, Chief Executive Officer of GO said all telecom companies in Europe are feeling these pressures. OTE, the Greek telecom, saw revenues decrease by 11% in Q1. Portugal’s PT saw its EBITDA decrease by 12%. Only the previous week, the EU announced further slashing of roaming rates.
The Maltese market is then further stressed because it is a saturated market and competitive pressures are, if anything, even worse.
GO’s profit before tax during the first six months of 2013 was €8.3 million. The comparable figure for 2012 was €20.4 million which, however, had reflected an exceptional gain of €11.4 million attributable to the sale of a plot of land in Qawra to the Government of Malta.
The group’s revenue amounted to €60.5 million compared to €63.6 million in 2012 representing a reduction of 4.9%. GO retains a strong client base servicing more than 500,000 connections across its main retail products including Homepack, the group’s successful bundle of services aimed at satisfying all telecommunication needs of a household.
Mr Michaelides said: “In spite of significant and intense competition in the telecommunications sector, during the first six months of the year GO managed to increase its total customer connections by 7,000. In particular GO reversed the decline in mobile market share, as also highlighted in the latest report from the Malta Communications Authority. At the same time, GO continued to experience growth in broadband connections, take up of Homepack and IPTV (Internet Protocol Television). The recent award of the rights for the English Premier League, together with other rights for the Champions League and Italian Serie A football confirms GO as the leading provider of quality premium TV. The acquisition of these rights is also in line with the Group’s strategy of enhancing the overall customer experience and not just providing a robust infrastructure.”
GO is preparing to utilize its many properties which are no longer required by the company. A Special Purpose Vehicle worth €50 million has been set up and in the coming months a number of decisions are expected to be taken as to which will be the properties to be retained, how to move other work into these sites and how to prepare the sites that will not be retained for their commercial use. The preparatory work is expected to last another two years.
The company will also launch a new web portal in the coming weeks. It will be announcing a new exciting product soon and, as regards the Fibre To The Home project, this is now covering all of Sliema.
Finally, as regards the Forthnet investment, whilst the investment in the Greek telecommunications company Forthnet, through Forgendo, has been written off, this investment remains on the agenda and is constantly monitored. GO is closely following recent events which highlight the strategic importance of Forthnet within the Greek telecommunications market.
Although Forthnet, like other telecom companies, has seen a decline in revenue, its subscriber base has risen to 970,000 from 848,000.
As announced previously, while GO is entitled to 20m new shares, it awaits the imminent publication of a prospectus before deciding whether it will take up the offer.