With its announcement yesterday, the OTE Group made it known that has begun negotiations with Digi Romania and Vodafone Romania for the sale of Telekom Romania Mobile (TKRM), while the interested parties have also signed a relevant memorandum of cooperation.
The development actually came about as Clever Media, controlled by businessman Adrian Tomșa (former prospective buyer of TKRM), left the scheme with which the Group was discussing, which had remained in the scheme as a minority shareholder. Essentially, the position of Clever Media is now taken by Vodafone’s subsidiary in Romania.
It is recalled that in a November 2023 announcement, OTE disclosed that it was in talks with Quantum Projects, controlled by the media group Clever Media in Romania, for the possible sale of TKRM. That shape has changed in May 2024 so it was announced that OTE was now in talks with West Network Invest, which is majority owned by Digi Romania with Clever Media group as a minority shareholder.
OTE Group “sees” a sale in early 2025
Now, OTE Group will have another interlocutor with whom it will speak the same language, yet another telecommunications provider, namely the Romanian Vodafone.
It is recalled that Digi Communications NV, known as its trade name Digi Groupis a telecommunications holding company that started (in its original form) in Romania, where it continues to maintain its main operations, but has now expanded to Spain, Italy and now Portugal and Belgium. The company has its current registered office in the Netherlands and its administrative seat in Romania.
Given that the amount of the purchase price is fixed and given (but not announced) by OTE, everything essentially depends on the speed with which the relevant Romanian regulatory authority will handle the matter.
OTE Group executives estimate (and optimism) that the sale of the Romanian subsidiary will be completed within the first quarter of 2025.
It is noted that the memorandum of cooperation between the two sides provides that some assets of TKRM will pass to the Digi side, while the remaining assets and the corporate entity itself will pass to Vodafone Romania.
Who is Telekom Romania Mobile?
Telekom Romania Mobile, a subsidiary of the OTE Group, offers mobile telephony and data services to approximately 3.8 million customers. The company’s commercial proposals in mobile telephony, both for residential and corporate customers, are offered under the trade name T, while Telekom Romania Mobile has the largest telecommunications infrastructure network in the country with over 98% population coverage of 4G services.
From Cosmorom to Telekom Romania
OTE’s Romanian subsidiary in Romania began operations as Cosmorom in 1999, a subsidiary of Romtelecom, as a mobile operator and began operations in April 2000. The company’s failure to gain significant market share quickly prompted sale discussions . However, decisions have been delayed due to disputes between the main owner OTE and the Romanian State.
Finally, in 2004 Romtelecom decided to sell the majority stake in the company. Purchase offers were made by Mobilkom (now A1 Telekom Austria), which was considered the favorite, and Deutsche Telekom’s Hungarian company Matev, but in the end OTE, which owned 54% of Cosmorom, decided to buy 70% of the company, leaving to Romtelecom the remaining 30%.
This was followed in July 2005 by the relaunch of the Romanian mobile telephony company, this time by Cosmote (a subsidiary of OTE), separately from the fixed telephony company Romtelecom. In June 2009 Cosmote acquired Zapp Mobile, a CDMA mobile operator which also had a 3G licence, which Cosmote operated.
At the end of 2013, Cosmote Romania had 6.1 million customers, of which 25.9% were prepaid subscribers.
In September 2014, Romtelecom and Cosmote Romania consolidated their mobile and fixed telephony services under a single brand and changed their respective legal names to Telekom Romania Communications and Telekom Romania Mobile Communications.
In November 2020, OTE agreed to sell 54% of the shares of the fixed network company Telekom Romania Communications to Orange Romania for EUR 295 million. In order for the transaction to be approved by the Romanian regulatory authority, OTE committed to purchase the remaining 30% of Telekom Romania Mobile’s shares. The transaction was completed in July 2021.
Subsequently, OTE failed to sell the mobile operator after the deal with Digi fell through, due to the latter only wanting to buy mobile antenna sites and frequencies, thus forcing Deutsche Telekom to rename it Telekom Mobile and to keep the company in OTE’s portfolio until a buyer is found.
In the event that the sale of Telekom Romania Mobile is completed, it will simultaneously be the closing of a cycle of… investments in the Balkan hinterland that the OTE Group had opened in the distant 1997 with the acquisition of the Serbian Telekom Srbija.
Source OT
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