Johannesburg, 13 Feb 2004
The local operation of Internet service provider Tiscali has dismissed reports that the Italian parent company may pull out of the country.
Various international news media reporting on the group`s fourth quarter results said that Tiscali chairman and CEO had said the group might divest from SA, Switzerland, Norway and Sweden.
An official statement relating to the results does say Tiscali will focus its financial and managerial resources in five key areas: the UK, France, Italy, Benelux and Germany, which together account for 80% of revenues and 90% of the broadband user base.
"The group will consider various strategic options for the other countries in which it operates, including possible divestitures from non-core areas to free resources to invest in the key countries," Tiscali says.
However, the local office is saying the idea that Tiscali is withdrawing from SA is the result of a misunderstanding because of a statement taken out of context.
Diego Massida, Tiscali SA`s CEO, says the group is not selling the local operation or divesting.
He says there are various smaller countries where Tiscali has operations that are facing financial and other difficulties. SA may have come up as part of the discussion because it faces obstacles such as a high level of regulation.
However, the operation here is profitable and contributes significantly to the group`s profit, which is not the case in some of the other countries.
"There is no intention to pull out of SA," he says.
Tiscali reported fourth-quarter gross revenues of 267.8 million euros, up 33% on the same quarter a year before.
SA accounted for 3% of that figure, with Switzerland contributing 2% and the Nordic region 5%.
Full-year gross revenues of 919.7 million euros compare with a previous figure of 748.4 million euros, while a loss of 215.8 million euros before interest and tax is an improvement on the prior-year loss of 504.9 million euros.
Tiscali became the sole owner of the local operation in January 2002 when it bought Vodacom`s 40% stake in ISP World Online for an unspecified sum. Tiscali took over Dutch-headquartered World Online in late 2000.
World Online had partnered with Vodacom in SA in 2000 to merge a number of ISPs. Tiscali initially bought 60% of the business from Vodacom, later acquiring a further 40%.
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