Bernard Moscheni: Orange Romania is now worth $1-1.3bn

Bernard Moscheni, head of Orange Romania, estimates the company to be worth 1-1.3 billion dollars, five years after its market debut. This is the first time when an executive officer of the mobile telephony operator has voiced such an estimate, which is all the more interesting as some of the investment funds that own Orange Romania stakes are preparing their exit.
The financial consortium led by AIG New Europe Fund, which controls 20.67% in Orange Romania, is thinking about exiting the business, market sources say. When the consortium acquired a stake in Orange Romania, the company’s value amounted to 600-700 million dollars.
If the $1bn estimate is considered, the consortium comprising about 15 financial investors (such as SocGen Romanian Fund, Global Finance and a Polish investment fund) would get some 206.7 million dollars for its stake.
However, since a change in the shareholding structure is not a pressing matter, Orange Romania is focusing on this year’s targets prompted by the new telecom coordinates, after the market deregulation. Consequently, the company aims to get a bigger slice of the data transmission market, to launch services on a new frequency (the 1,800 MHz, which was “out of reach” until recently) and to obtain the best cash flow so as to contribute to a cut in the debts of France Telecom, the main shareholder of Orange Romania. As for the ties with RomTelecom, Moscheni did not follow the lead of competitor MobiFon and chose not to end the cooperation with the national telephony operator on the segment of international voice traffic.
According to CEO Bernard Moscheni, last year “we snatched almost 8,000 subscribers from the competition, such as Mobexpert, GlaxoSmithKline, the Ministry of Justice and the Ministry of Public Finance.”
“This year, we aim to position Orange Romania as an alternative operator, not only for mobile telephony, but also for data transmission. Moreover, we even want to provide our infrastructure to certain carriers that need these facilities,” Bernard Moscheni explains.
Consequently, Orange Romania will soon launch a promotion campaign for the data services, which will also feature massive tariff cuts.
“We intend to increase the revenues derived from data services, GPRS, MMS and mobile banking, a service we will launch soon,” Moscheni says.
Orange Romania will also have to join forces with the other group companies and help cut the debts of France Telecom (the company that owns Orange). “France Telecom has asked all of the group companies, even if they are small, to increase the value of the free cash-flow as much as possible. This is one of our biggest targets,” Moscheni explains. France Telecom had requested Orange Romania a free cash-flow of $98 million by the end of 2003, but the company reported 102 million dollars on December 31.
Orange Romania aims to increase turnover by 15% this year, up to 430-440 million dollars. The operator posted 393 million euros in turnover last year, up 3.96% since 2001, when it logged 378m euros in revenues.
“Romania is no longer an emerging market, but a developing country, with limited market growth. I hope turnover will go up 15% this year to some 430-440 million dollars. Profits will also go up, unless they are affected by the multitude of taxes required by the Romanian State,” says the CEO of Orange Romania.