Digi Mobil. The mobile phone operator owned by RCS & RDS is at the center of a warning made by the company yesterday, complaining about the measures taken by the Romanian Government. I told you last night that RCS & RDS complained that GEO 114/2018 can have serious effects on the evolution of the company, but also on the investments it makes, as customers may also be affected, and as Digi Mobil is part of the group, it is targeted by the warning.
Digi Mobil. We told you at the end of 2018 that it is possible that the prices of the services offered by the mobile phone operator will be affected by that emergency ordinance, and now the company makes the first announcement to support this. It was expected that this would happen, since Orange, Vodafone, or Telekom also showed their dissatisfaction vis-à-vis GEO 114/2018, and if you are Digi Mobil customers, you can expect prices to increase to cover the turnover tax.
Digi Mobile. WARNING ISSUED by RCS & RDS
Digi Mobil. It is one of those mobile phone operators that for 10 years did not pay the annual tax imposed by law to ANCOM because the institution did not exceed its activity budget, so all companies were exempted from paying it. The government said that this is not normal, which is completely true, but the new turnover tax could have no other impact on Digi Mobil, or the other operators, than an increase in prices, because that's how things work in Romania.
In our opinion, GEO 114/2018 harms the development of the telecommunications and energy industries in Romania as it substantially increases, without adequate consultation and without serious justification, the tax burden for companies in these sectors, thus limiting the possibility of making additional investments and affecting customers . We will continue to assess the impact of GEO 114/2018 on our businesses and take those measures that are deemed necessary.
Digi Mobil. The Romanian government hopes that all telecom companies will absorb the turnover tax, considering that in recent years they have not paid high taxes for profit or turnover, but unfortunately the customers are still suffering. Considering that this tax is applied directly to receipts, it would not be excluded that Digi Mobil and other operators would increase the prices of their services by exactly this percentage, but it is possible to take the decision to absorb the new tax, although it is tens of millions of euros per year.
Digi Mobil. For 2019, the operator had planned serious investments, especially in buying licenses for the frequencies that will be used for the new 5G networks in Romania, and it is interesting to see what will happen with them.
