Dan Nica Minister of Communi-cations and IT

Romania’s Information Technology revolution started out several years ago at a snail’s pace. Most of the moresuccessful companies in the sector today emerged from the four-figure personal savings accounts of ambitious entrepreneurs who have since added a couple more digits to their bankbooks. IT and the booming telecommunications sector are currently two of the most promising industries in the country.
In a bid to bring the country in line with EU standards while guaranteeing the continued growth of the industry, the government is aggressively pushing through IT legislation. “Our commitment is to create fair and transparent laws and a stable economic and legislative environment in which both Romanian and foreign companies can operate,” explains Communications and Information Technology Minister Dan Nica. “The aim is to create a market just as safe, secure and stable as in the West or other parts of the developed world.”

Mr. Nica says another important goal for his ministry and the government is to open up the market by privatizing state-owned firms. The minister has made several promotional trips to the United States with some success.
“An important U.S. investment program to develop a new mobile phone system is currently underway here. The Americans chose Romania for a US$350 million investment in the project because our country offers favorable conditions for further development and quite a large market,” Mr. Nica points out.

Vassilios Tsakoniatis CEO of Romtelecom

In 1998, majority voting rights and a 35% stake in Romania’s giant state-owned telecommunications company Romtelecom were purchased by its Greek counterpart, OTE, for US$675 million. The deal ushered in a new era of investment, with an OTE pledge to inject some US$2.7 billion into Romtelecom over the following five years.“Romtelecom is currently developing and going through a modernization process in preparation for market liberalization in 2003,” notes Mr. Vassilios Tsakoniatis, Romtelecom’s CEO. “We have focused our investments on expanding the network into towns and larger villages. The reality is that the development in telecommunications has not been rapid so far, as penetration is around 20%, which is too low for this country.”

Romtelecom is set to install 2.5 million digital lines by 2002

Romtelecom has been profitable ever since OTE purchased its stake, with profits of US$90 million in 1999 and US$100 million in 2000. And as it enters new markets and expands telephony and Internet services to include fiber optics and 2.5 million digital lines by the end of 2002, earnings are expected to soar.
“The good thing about foreign investment is that it allows us to apply new technology and offer it to the public. The opportunities are really great: in 1999 we had US$554 million invested and last year we had investments of almost US$600 million. Foreign investors should be aware that there are so many opportunities here because it is a young market and they should take advantage of this,” Mr. Tsakoniatis noted.
Romtelecom currently has a contract with Lucent Technologies of the U.S. as well as with 3M to provide components for the company’s fiber optics network.

Mihai Gherman Deputy General Manager of Intrarom

Another Greek company, Intracom, has a 68% stake in Romania’s software firm Intrarom. The subsidiary was founded in 1993 and is one of the largest manufacturers of telecommunication and information systems in Romania. Intrarom provides products and integrated services in areas such as public telecommunications networks, network management services and IT management services. It is also the main supplier of telecommunications hardware and software to Romtelecom.
According to Intrarom’s deputy general manager, Mihai Gherman, the local IT market in Romania is still in its early stages and the future possibility of exporting more of the company’s products depends mostly on the ability of securing large investments.
“There is a huge potential, that is mostly human potential, for making software in Romania. We have important schools and excellent specialists in the field,” Mr. Gherman explains.