Deutsche Telekom is said to be looking to exit the Romanian market and wants for €1 billion for the business.
While Telekom Romania has been collecting relatively healthy revenues in the country, it has been in decline in recent years. Across the first nine months of 2016, revenues in the country dropped 0.4% to €718 million, which has been cited as the reason for the exit. Subscriber numbers also fell across the same period to 5.87 million, down from 5.99 million at the start of the 2016.
The reason for the move is unclear and may or may not involve longing for Bratwurst or fear of vampires, but according to Mirsanu.ro (thank you Google Translate), Orange and local operator RCS & RDS are sniffing around the deal. Local analysts believe two such deals would be worth in excess of €1 billion.
On the mobile side of things, Telekom Romania currently sits at third in the market share rankings, accounting for 21%, according to Ovum’s WCIS service, with Orange in first and Vodafone in second, controlling 36% and 31% respectively. RCS & RDS is down in fourth with 12%. While DT may want to exit the market, the European Commission (hereafter known as the Gaggle of Red-tapers) might have an issue with the plan.
The DT team is yet to confirm the rumours, but Mirsanu.ro sources state Orange is interested in purchasing the fixed unit, while RCS & RDS is looking at the mobile business. Orange currently leads the market share rankings for the mobile segment, and does currently have a deal in place to use DT’s fixed network, but such a deal will give the team more independence as well as additional weight to add into its bundling plans in the country.
The Gaggle of Red-tapers has been fixated on having at least four operators in any country to ensure competition remains fair for the consumer. Should one of the four present operators want to exit the market, precedent has been that the sale should be made to a new player to maintain the status quo of competition.
The Gaggle of Red-tapers is likely to find an issue with such a market consolidation exercise, though how our worldly wise bureaucrats read into the situation remains to be seen. If the Gaggle is true to form, we should expect a highly efficient decision out of them in 2022 or sometime around then.
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