Finnish CEO drastically sanitizes Lietuvos Telekomas

  • 2001-06-07
  • BNS
VILNIUS - Using drastic measures, Tapio Paarma, the Finnish general director of Lietuvos Telekomas, has in three years made the Lithuanian fixed-line provider into one of the most profitable standard telephone companies in Europe, the Finnish business paper Kauppalehti wrote on June 1.

His effectiveness is best characterized by the operating profit percentage of 55.7 percent, the highest in Europe, the newspaper reported.

Paarma uses tried-and-true methods to keep the company in the black – increasing turnover and keeping a strict control over expenses.

"This is painful and provokes criticism, as we have to do it in 4 or 5 years. There is more time in the other Baltic countries. In Estonia, for example, there has been a monopoly for eight years," Paarma said.

Amber Teleholding, a subsidiary of Sonera and Telia, bought 60 percent of Lietuvos Telekomas in 1998 for $510 million, Kauppa-lehti wrote. According to the contract, Telekomas got a standard telephone monopoly for both local and long-distance calls until the end of 2002.

Telekomas controls a 80 percent of the international-call market. Telekomas also had a GSM license, which it had to give up after its majority owners Telia and Sonera bought a controlling stake in Lithuania's biggest mobile-communications firm Omnitel.

In the course of drastic sanitization, the number of employees in Telekomas has declined by 4,000. The sanitization policy has made Paarma one of the most unpopular business managers. Lithuanian television has attacked him as a representative of the "ravaging" Western style of management.