BRUSSELS (Dow Jones)--Belgian telecom operator Belgacom SA (BELG.BT) Friday said it will focus on growing its domestic operations.
The company forecast a decline in fixed-line sales of about 3% this year and said it aims to maintain its mobile division sales or even grow them by up to 3%.
"There has been no change in strategy: our focus remains to reinforce our position in the Belgian market," said Belgacom CEO Didier Bellens.
Earlier Friday, Belgacom posted a jump in 2004 net profit as the company used its strong cash reserves to pay an extra dividend and buy back shares. Net profit rose to EUR922 million from EUR172 million. The company proposed a dividend of EUR1.93, a normal dividend of EUR1.38 a share coupled with an extraordinary dividend of EUR0.55 a share and said it would launch an EUR300 million share buyback program.
The company's fixed-line division is facing competition from rival carriers such as Denmark's Tele2 AB (TLTOA) and Flemish regional provider Telenet - as well as a shift toward mobile usage.
But Belgacom's mobile unit Proximus has faced intense competition from rivals Mobistar SA (MOBB.BT) - controlled by France Telecom (FTE) - and Royal KPN NV's (KPN) Base. At a press conference, Belgacom officials said the company would hold onto the EUR300 million in shares it is buying back. This strengthens its potential to finance international acquisitions by using its shares as a takeover currency.
Belgacom is short-listed to bid on taking a majority stake in Cesky Telecom AS (BAATELEC.PR). CEO Bellens said he had met with U.S. private equity firm Blackstone Group (BGP.XX) about preparing a joint bid, but preferred for now to bid alone.
Company officials said any acquisition won't hurt its dividends. Bellens likened Cesky to "a little Belgacom" since it also generates free cash flow and services a population similar to Belgium's 10 million.
"If we buy Cesky, we will still have the opportunity to do other investments," Bellens said.
Belgacom recently announced a venture to combine its wholesale operations with Swisscom AG (SCM)
"We are now in the driving seat and open to further consolidation in the wholesale market," Bellens said. But he said there are no ongoing negotiations with other companies.
-By Steve De Bonvoisin and William Echikson,Dow Jones Newswires;32-2-285-0134; william.echikson@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 25th February 2005
Posted to: www.cellular-news.com/story/12136.php