América Móvil: We have no plans for a hostile takeover of Telekom Austria

América Móvil is not planning a hostile takeover bid for Telekom Austria despite the recent failure of its efforts to gain control of Dutch operator KPN, and said it sees itself as a long-term partner for the Austrian operator.

"You can expect many things from us but nothing hostile," América Móvil CEO Daniel Hajj told Austria's News magazine, according to Reuters. "We choose our common path with our partners in Austria."

América Móvil owns 23 per cent of Telekom Austria, which is the largest operator in Austria, with businesses across Central and Eastern Europe. The operator has suffered from the cutthroat price competition on its domestic market, and this situation will be further exacerbated by the high price that the country's three operators will have to pay for LTE spectrum.

The total amount to be paid by Telekom Austria, T-Mobile Austria and 3 Austria is about €2.014 billion ($2.71 billion) for frequency blocks in the 800 MHz, 900 MHz and 1800 MHz bands. Telekom Austria CEO Hannes Ametsreiter described the outcome of the auction as a "bitter pill to swallow" after all three operators said they have paid among the highest prices for spectrum in Europe in a market that has among the lowest mobile tariffs in the region.

According to Bloomberg, Hajj told News magazine that América Móvil is "not happy" with the auction, and said Telekom Austria's financial situation makes a capital increase at the company "very likely."

In the first nine months of 2013, Telekom Austria said group revenue declined slightly by 2.6 per cent to €3.13 billion, while group EBITDA dropped by 9.8 per cent to approximately €1.03 billion due to declining revenues and higher handset subsidies. Net profit was almost €160 million, down 11.6 per cent from the previous year.

"In the first nine months of 2013, we were able to achieve a solid operating performance, defying the persistently difficult framework conditions," commented Ametsreiter. "With a focus on the premium customer segment combined with higher time-limited subsidies for smartphones, we are on the right track to safeguard our core mobile business across the group."

Analysts were reasonably positive about the results, but were concerned about the drop in ARPU from the operator's fixed-line business in Austria. "This was expected to be a tough quarter. Results overall are decent, though the market may be concerned by the worsening trends in Austrian fixed, an asset viewed as relatively resilient," Citi analysts wrote in a note, according to Reuters.

Nonetheless, T-Mobile Austria CEO Andreas Bierwirth recently told Reuters that an end may be in sight to the mobile price war now that 3 Austria has dropped the €7.50 SIM-only tariff under its HalloSIM plans.

For more:
- see this Reuters article
- see this Bloomberg article
- see this Telekom Austria release

Related Articles:
T-Mobile sees end to Austrian price war, as new MVNO targets 2014 launch
Austrian operators slam high price of LTE spectrum
Orange brand disappears from Austria as 'the new Three' emerges
EU's Kroes slams member states over 800 MHz delays
Telekom Austria reports Q1 slump as consolidation fails to halt price war

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