Page 20 - bne_Tech_09_2019

Telecom
September 2019 www.intellinews.com I Page 20
President Iohannis, speaking in Washington, said that the memorandum did not point to
a particular company, but rather principles.
“The memorandum does not refer to a particular company, but is a memorandum that clarifies some criteria of transparency, compatibility with the rule of law and so on,” said Iohannis.
The memorandum sets transparency criteria for the providers that will be selected to develop 5G networks.
The position regarding the Chinese tech companies and the 5G technology deployment was included in the joint statement regarding the strengthening of relations between the two states.
Russia's Rostelecom delivers solid 2Q19 results, upgrades guidance
Russia's integrated telecom major Rostelecom increased revenues in 2Q19 by 4% year on year to RUB80bn ($1.2bn), with Ebitda up by 12% y/y to RUB27bn at a margin of 34%, beating the consensus expectations by 3%.
The company's net income was up by 40% at a 5% net margin, with free cash flow at RUB11.4bn versus negative RUB0.8bn in 1Q19.
In addition to support from state contracts, earlier this summer Rostelecom announced the terms of restructuring that will allow it to consolidate 100% in Tele2. The mobile runner- up turned the corner in 2018 and continued to deliver strong results in 2019.
“Romania is committed to working with the United States to combat the cybersecurity threats posed by Chinese vendors in 5G networks,” the statement reads.
Answering a specific question on this, President Trump said that Romania should, and he believes will, “evaluate in detail the businesses of the Chinese companies before deciding on country’s critical infrastructure”.
The US has been among the countries that accused Chinese group Huawei, one of the biggest providers of telecom technology,
of being involved in the espionage operations of the Chinese state.
Rostelecom also upgraded the guidance for 2019 to 3%+ growth in revenue and Ebitda (from at least 2.5% previously).
"The numbers came in fairly solid, including on FCF (with the help of working capital change). Slightly upgraded guidance still looks conservative on Ebitda. [An] update on [the] pending Tele2 deal is probably of more interest at this point," BCS Global Markets commented on August 2.
The BCS GM analysts have a Hold recommendation on Rostelecom's shares with target prices of RUB82 and RUB74 per common and preferred shares respectively.