Estonia: Recession and increased regulation have reduced profits at network operators

[Baltic Course] The first-quarter profits of Eesti Telekom group in 2009 fell by 16.8% in comparison to the same period of time last year. Turnover of Elisa Estonia fell by 15% and profit of Omnitel decreased by 26.8%. Profits of Eesti Telekom reached 375.5 million kroons. Telekom experienced a fall of ten percent in its sales revenue, amounting to 1.3 billion kroons.

The turnover of mobile communications services fell by 15% to 740 million kroons and the profits of this sector fell by 20.6% to 216 million kroons.

In a press release sent to the stock market, the enterprise explained the decline in sales revenue with the cooling economy and the regulations imposed by the European Union on the mobile communications sector.

According to Eesti Telekom, the growth in customers with mobile communications contracts, in customers of mobile and fixed broadband customers and TV customers continued. Due to efficiency programmes that have been launched earlier, the fall in revenue could be compensated by decreasing spending in the same proportion and the enterprise managed to maintain the pre-amortisation operating profit margin.

The turnover of Elisa Estonia in the first quarter of 2009 amounted to 343 million kroons, writes Äripäev.ee.

In comparison to the same period of time last year, the turnover fell by 15%.

"The main reason for the decline in turnover was the falling trend in use of services and the decline in interconnection revenue," said CEO of Elisa Sami Seppänen.

"Due to the activities that were started a year ago in order to raise efficiency, Elisa's EBITDA was quite good – approximately 35%," he added.

Elisa Estonia increased its number of customers by 10,200 in the first quarter in comparison to the same period of time last year, reaching 337,600.

The company Omnitel earned 182 million litas (52.82 million euros) in January-March 2009, a decrease of 26.8% year-on-year.

Meanwhile, Omnitel services consumption advanced by one fifth compared to the beginning of 2008. The company's number of clients also advanced over the year. In January-March 2009 Omnitel has 2.2 million active consumers. This figure stood at 1.987 million people in the same period of 2008.

Profits of Estonian telecommunication companies fell in Q1