Telekom Austria buys into Belarus

Telekom Austria expanded its operations into Belarus on Wednesday, when it agreed to acquire a stake in Cypriot SB Telecom, owner of Belarusian mobile operator MDC.

The Austrian operator is to pay around Eur730m for a 70 per cent stake in SB Telecom, held by chairman Ead Samawi and his partners.

The operator has also entered into a put option agreement, which would allow it to buy the remaining 30 per cent stake in the fourth quarter of 2010 for approximately Eur320m.

Samawi will remain chairman of SB Telecom, while all executive management positions in SB Telecom and MDC will be nominated by Telekom Austria, which will also have full operational control.

MDC markets its mobile services under the brand names “Velcom” for postpaid services and “Privet” for prepaid services and is the number two operator in Belarus with a market share of approximately 42 per cent and more than 2.7 million customers.

“The acquisition of MDC is the consistent execution of our strategy for profitable growth in Eastern- and South-Eastern Europe, it offers us an entry to the attractive telecommunication market in Belarus while the terms of the transaction once again underline our disciplined approach to expansion,” said Boris Nemsic, CEO of Telekom Austria Group and CEO of mobilkom austria.

“After the successful integration of the highly profitable Bulgarian market leader Mobiltel we once again engage in a similar transaction and increase our addressable market by approximately 30 per cent to 44 million inhabitants in the countries Telekom Austria Group is present” Nemsic added.