The consolidation of the Romanian ISP (Internet Service Providers) market seems to be the only alternative to make the companies in this business profitable as quickly as possible.
An alliance with strategic partners that have attained financial stability is seen as the best solution for continuing the Internet business at a much more complex level both financially and professionally.
Following the example of the competitors that have already concluded such partnerships, PC Net is now looking for a big investor, too. While attending the NetGen-LightSpeed conference organised by IBM in Bucharest, Mihai Batraneanu, PC Net general manager, explained: "PC Net will most likely be sold to a large telecommunications operator, the size of Vivendi conglomerate."
However, the project is still in the searching-for-a-suitable-partner stage. The company has had talks with the leading Israel-based ISP, Internet Gold, which "is ten times bigger than PC Net in almost everything, but has the same policy as ours," Batraneanu added.
Internet Gold currently has 300,000 subscribers, approximately $25 million in revenues (in relation to PC Net's $2.5 million) and 35 million page impressions (pages visited) on the main portal it operates in Israel (still ten times more than Romania Online, the portal administered by the Romanian ISP).
The point is that almost the entire system in Romania works in different ways than in other countries, according to PC Net boss. Romanian ISPs must both create the infrastructure and provide internet services. In other countries, it is the telecommunications companies that come up with the infrastructure, while the providers' only job is to offer their clients high-quality Internet services at affordable prices.
PC Net, one of the leading companies in the business might be sold "next year, by February-March." There was also the possibility of organising an open tender for it, as PC Net's Mihai Batraneanu was telling Ziarul Financiar last month.
At the moment, online businesses in Romania do not bring any profit. "PC Net is losing about $25-30,000 every month, as any other local ISP, after all." Under the circumstances, it is very difficult for a provider to attract investors and be sold for a lot of money.
Even so, many Romanian ISPs, most of them in leading market positions, have found major partners. FX Internet sold 70% to Metromedia International Telecommunications for $2.5 million, while Euroweb paid $4 million for the locals Starnets and Rokura. The takeover of DNT company by Astral is to be signed one of these days. Astral also bought Kappa for $8 million at the end of last year.
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