Telekom Austria to bid for Belarusian mobile operator

14 September 2007

Telekom Austria said on Monday 10 September that it was in talks to buy one of Belarus'' largest mobile operators for more than €1.6 billion ($2.2 billion). If the deal goes through, it would signal that the country''s tightly controlled telecom sector is finally opening up to foreign investment.

The Austrian company would not provide any further details of the target, but analysts suggest it could be Velcom, Belarus'' second largest mobile operator after MTS Belarus, with a market share of around 40 per cent. Telekom Austria is 25 per cent state-owned. It operates in Austria, Bulgaria, Croatia, the Czech Republic, Lichtenstein and Slovenia.

Speculation started when Austrian newswire APA reported last week that Telekom Austria was looking to spend more than €1.6 billion ($2.2 billion) on a mobile operator in Belarus. CEO Boris Nemsic had recently expressed an interest in buying another asset in central or eastern Europe worth more than €2.65 billion ($3.65 billion).

Telekom Austria has been one of the most acquisitive European incumbents in recent years, buying a string of mobile operators in the Balkans as well as Austrian ISP eTel.
But it has lost out on a number of recent auctions in emerging markets.

In December, Serbia''s state-controlled Telekom Srbija won an auction for a 65-per cent stake in Telekom Srpske. Its €646 million ($898 million) bid bested Telekom Austria''s offer.

In July, Telenor ASA outbid Telekom Austria subsidiary Mobilkom Austria to acquire mobile operator Mobi 63 with a bid of €1.5 billion ($2 billion).