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Austria’s biggest telecom carrier Telecom Austria is set to initiate cost-cutting measures as the operator saw net profits fall 34 percent in the first quarter of 2009 hurt by declining fixed line sales and high value for domestic currency.

Austria’s state-run operator’s net income plunged 34.2 percent to $115 million, a huge drop compared to its earning of $175 million for the same fiscal quarter last year.

Much of the loss was caused by drop in fixed line sales and high value for domestic currency that undermined the earnings the operator generated from units abroad.

“Revenues decreased by 5 percent to $1,623 million primarily due to lower revenues in the Fixed Net segment resulting from lower wholesale revenues and voice volume as well as the sale of the Fixed Net subsidiaries in the Czech Republic, in Slovakia and in Poland respectively,” the operator admitted in its statement.

 

For an instance, its subsidiary Velcom in Belarus was impacted by the devaluation of the Belarusian Ruble at the beginning of 2009.

 

Total comprehensive loss was 185.8 million euros, compared to comprehensive income of 30.1 million euros for the same quarter a year ago.

 

The state- owned carrier said it expected 2009 revenue to be "slightly weaker" than its previous forecast, but vowed it would earn nearly 1.9 billion in earnings before EBITDA (interest, tax, depreciation and amortization) in the full year.

 

In the last fiscal quarter, EBITDA were 620 million because of declining mobile revenue in Austria and Bulgaria, the major markets for operator.

Revenues for the quarter dropped 5 percent to $2 billion from $1.7 billion in the year-ago quarter.