Telekom Austria’s Nemsic to leave for Vimpelcom

Vimpelcom is a far larger operation than TA, with 57.8 million mobile customers across Russia, Georgia, Armenia, Tajikistan, Uzbekistan, Kazahkstan and Ukraine as of Q308. The firm also won licences to operate in Vietnam and Cambodia in 2008. Mobilkom, TA’s mobile arm, which Nemsic ran as CEO prior to assuming control of the whole group, counted 17.8 million customers at the close of 2008 across Austria and seven Eastern European states.

The carrier’s fixed operation has long struggled in Austria, not least because of the success of the mobile offerings that Mobilkom and its competitors have developed.

“We’re selling loads of data cards,” Nemsic told in February 2008, estimating that the company’s mobile operations had at that time sold more than 500,000 data cards in total. “But the success of mobile data is having a negative effect on fixed line. We are losing 20,000 fixed lines per month, with people going to mobile,” he said.

TA published its full year 2008 results last week, with fixed net operating loss for the year 2008 dropping to Eur531m from a profit of Eur151m in 2007, although the introduction of new product bundles slowed down access line loss from 47,600 in 4Q07 to 2,400 in 4Q08 leading to net adds in November and December 2008 for the first time in 12 years. The number of access lines declined by only 97,600 lines during 2008 to 2.3 million, compared to 224,500 lines in 2007 reflecting a material slowdown of fixed net access line loss, Telekom said.

Announcing his resignation on Monday, Nemsic said: “Today Telekom Austria Group is a well-positioned and strong player in the telecommunication markets in Eastern and Southeastern Europe, with sound domestic mobile and fixed net business. The strong growth of our mobile communication segment in 2008 in particular, as well as the first positive developments of the fixed net access lines in 12 years are clear evidence of the potential of this company.”

He continued: “Telekom Austria Group has strong management teams in all of its operations. I am proud and convinced that the company is uniquely positioned to shape the future to the benefit of all stakeholders.”

The Telekom Austria Supervisory Board is expected to convene this week to decide on Nemsic’s successor.

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