Bulgaria's Mtel Brought EUR 400 M Loss to Telekom Austria

Business | June 26, 2014, Thursday // 12:31
Bulgaria: Bulgaria's Mtel Brought EUR 400 M Loss to Telekom Austria A pedestrian takes dogs for a walk past the Telekom Austria AG headquarters in Vienna, Austria. Photo by Bloomberg

Assets of Telekom Austria into Mobiltel, considered to be Bulgaria's largest telecom, were re-evaluated and written down by EUR 400 M, according to the Austrian company.

Telekom Austria, which owns Mtel, cited losses at the Bulgarian company as a reason for the step.

Rising capital costs for the Austrian company and Bulgaria's dwindling telecom market are causing the situation to deteriorate, the Austrian venture found out after conducting regular sensitivity analyses which shows the potential impact of variables on the economic output.

The situation in Ukraine also played a negative role in Bulgaria's performance, the company's experts believe.

They also say Brussels' constant push to lower prices of telecom services is also leading to a downtrend.

All of the three major Bulgarian telecoms pointed the same reasons to explain the slowed-down pace of growth in their annual reports, according to wesbite money.bg.

However, Telekom Austria assured the EUR 0.05 dividend per Mtel asset is to remain unaltered.

Mtel's assets amounted to BGN 2.4 M (EUR 1.2 M) in 2013.

But a spokesman for Telekom Austria said book value of its Bulgarian subsidiary would be EUR 680 M after the move.

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Tags: Telekom Austria, Mtel, Mobiltel, subsidiary, telecom, telecoms market
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