Telekom Austria eyes No.1 spot in southeast Europe

Telekom Austria wants to become the largest player and most integrated provider of mobile and fixed services in southeast Europe.

In an interview with Austrian daily Wirtschaftsblatt, CEO Hannes Ametsreiter said Telekom Austria is focusing on convergence for a very good reason: "Customers who buy our bundled products stay longer," he said. "This is a growth opportunity that others do not have," he added, noting that Telekom Austria has acquired several cable network operators and satellite companies since 2009.

Potential opportunities in southeast Europe could be Croatia's H1 Telekom or Serbian cable operator SBB, which owner Mid Europa has recently put up for sale. Ametsreiter said SBB is an interesting company and said Telekom Austria would be sure to obtain information about the sales process.

However, he remained mum on how the operator would finance such a deal, which Wirtschaftsblatt noted could be as much as €800 million should SBB merge with Telemach. Ametsreiter stressed that Telekom Austria has enough in the pot to finance small acquisitions, but larger deals would require more discussion on other financing options such as a capital raising exercise.

On its domestic market, Telekom Austria now competes with only two mobile operators, 3 Austria and T-Mobile Austria, following 3 Austria's merger with Orange Austria. Ametsreiter said competition on the mobile market remains extremely tough, and blamed regulation for much of the decline in revenue. "All European telecoms operators will be weakened further and that is regrettable with regard to the structure in Europe," he said. "I hope that there will be a rethink as soon as possible," he added, referring to latest plans by the European Commission to cut roaming charges, among other aspects.

Ametsreiter said European operators look enviously at the US, where there is less regulation and more investment than ever before. "For example, less strict regulation of fixed networks in Europe would trigger investments of up to €100 billion," he said. "It's baffling to me why this is not done," he added.

On the European mobile market, Ametsreiter called for another look at competition law to allow a further consolidation of the market: "In the US there are four mobile operators, in China three and in Europe more than a hundred. In Europe we therefore have to decide if we want global players or not. If we do want them, then the competition law has to be changed."

As to Telekom Austria's future in a consolidating European market, Ametsreiter believes the operator is in a good position thanks to its links with shareholder América Móvil and partner Vodafone.

Meanwhile other telecoms executives this week echoed Ametsreiter's comments on EU regulations: according to the Financial Times, the proposal for the abolition of roaming charges as part of a single market for telecoms has been greeted as little more than a "headline grabbing move" that will deny operators €7 billion in roaming charges by 2020.

For more:
- see this Wirtschaftsblatt article (translated by Google Translate)
- see this Financial Times article (sub. req.)

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