Stake sale reports show faith in Telekom Austria

Reports a consortium is attempting to buy 20% of Telekom Austria are entirely believable and could even be good news for the telco.
 
The operator is struggling to grow at the moment, recently slashing its full year earnings forecasts after generating a loss of €59.9 million in the first half – down from a profit of €159.9 million in 1H10 -, and seeing its plans to expand into Serbia rejected by that country’s government because it wouldn’t raise its offer for Telekom Srbija.
 
However, the reported interest in acquiring a major stake by a consortium led by Austrian businessman Ronny Pecik and including Egyptian telecoms tycoon Naguib Sawiris is a sign of faith in Telekom Austria’s management.
 
After all, this is the management team that predicted 2011 would be a tough year way back in December, but that committed to above-market investment in its networks and infrastructure to get back to growth within three years. That commitment includes plans to spend €800 million on the firm’s domestic networks through 2011.
 
The Telekom Srbija case also show savvy management, with Telekom Austria bosses reasoning that paying an extra €300 million for the operator just didn’t make any sense. Compare that to its move in February to acquire a controlling stake in Bulgarian fixed-line carrier Megalan Network, which offers huge potential because the country has one of the lowest broadband penetration rates in Europe.
 
The firm on Monday said it hasn’t received the required notifications of the planned stake buy, but that situation could quickly change given the acquirers must only give notice within two days of making their move.

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