Telekom Austria extends convergence strategy with Bulgarian cable buy

Telekom Austria said its Bulgarian mobile subsidiary Mobiltel has agreed to buy 100 per cent of cable operator blizoo Bulgaria from current owner EQT V for an undisclosed price.

The deal, which is expected to close in the fourth quarter of 2015, represents a further convergence play by the Austrian operator, which now owns a mix of fixed and mobile operations in Belarus, Bulgaria, Croatia, Serbia, Macedonia, Liechtenstein and Slovenia.

Telekom Austria only recently secured approval for the merger of its subsidiary Vip Operator with Telekom Slovenije's subsidiary One to create a new entity called one.Vip on the mobile market in the Republic of Macedonia. It also acquired fixed-line provider blizoo Macedonia from EQT in June last year.

blizoo is the second-largest fixed-line operator in Bulgaria and has an 8 per cent share of the fixed broadband market and an 11 per cent share of the TV market, according to Telekom Austria estimates. The company currently has about 373,000 subscribers and covers 1.3 million households. In 2014, the company reported revenue of €47 million ($51 million) and EBITDA of €19 million.

Private equity fund EQT originally created Blizoo in 2009 by combining the number one and number two digital cable TV market players in Bulgaria and Macedonia.

For its part, Telekom Austria is hoping to drive growth in its markets in South East Europe through its fixed-mobile convergence strategy. The company was recently forced to cut its group revenue forecast for 2015 as a whole due to the "below-plan" performance of its mobile and fixed businesses in the region.

In the second quarter of this year, revenue declined in all markets outside Austria, with rates of decline ranging from -1.1 per cent in Belarus to -5.9 per cent in Bulgaria, which continues to face challenging market conditions.

The Austrian group, which is now majority owned by Mexico-based America Movil, also recently named Alejandro Plater as the successor to CEO Hannes Ametsreiter, who is leaving to take up the helm at Vodafone Germany.

For more:
- see this Telekom Austria release

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