Hungarian Telephone and Cable Q4 2007 Earnings Call Transcript

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2008-03-12 10:50:21.0

Tags: Hungarian Telephone & Cable Corp.

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from the line of (inaudible). Please go ahead.

Unidentified Analyst

Hi. Good quarter. Just a couple of questions. First, could you talk a bit about how you expect the revenues and the DA to perform in local currency this year, they do at a particular focus on the business segments, and we can now show that's performance and as strong as maybe, you've imagined, it could have during 2007? And second question is what is the total of restructuring instead of integration costs you expect during 2008? Thanks.

Martin Lea

Okay. Let me just talk about the business segment first and then Rob will try to pick up on the integration costs point. The B2B segment, if you look at, let's just talk about in Invitel, [price] had been acquired by HTCC, we cited lot of attention on the customer acquisition, passed by our traditional concession areas. We had a very clearly strategy to focus on the SME segment. We've created a pretty much new sales and marketing organization, a new product portfolio and we were very successfully gaining and acquiring new customers.

And we started to see or we start to get to the point where the growth been acquired because of the new custom acquisition was bigger if you liked in the lawful decline that was occurring in our traditional concession area mainly due to the reduction in voice traffic.

If we look at the situation at the beginning of 2007, first, I've mentioned a number of times that these two large contracts which were ceased in (inaudible) and that obviously meant for the whole of '07 compared to '06. The numbers reflected those two contracts going away.

Secondly, we had to really do the same sort of work for the whole of the group during 2007 that we got in the part in '06. In other words, we have to really focus the sales and marketing organization as an integrated unit that really start to go out and focus on new customer acquisition again how far our traditional confession areas. It was one of our key strategic focus areas during 2007.

My expectation is that during 2008 we will see a cessation of the downturn in gross margin in the B2B segment. We will start to see stability and I would hate that at some stage during the year that we will actually see the whole B2B segment turn into growth. And that's obviously helped by growth you factored in B2B segment, although we didn't look at it in the presentation, the rate of decline in traditional voice traffic in our concession areas is of course slowing as well, which helped us in addition to the growth how far our traditional confession areas. So we're at B2B, it's being tough areas for us during '07 then I would expect to see a significantly improved scene during 2008.

 

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