A1 Telekom Austria planning investments in former Yugoslavian countries – EUR 1 billion for acquisitions

Source: Novosti Tuesday, 10.04.2018. 14:46
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(Photo: telekom.rs)
A1 Telekom Austria, which tried to buy the Serbian national operator, Telekom Srbija, seven years ago, is not giving up on the possibility. As the company's CEO, Alejandro Plater, stated, the concern wants to further expand to the eastern Europe, primarily through acquisitions. He emphasized that there needed to be more investments in Serbia, Croatia and other countries of the former Yugoslavia.

– The east is in our DNA and we therefore have to consider a further expansion to the region. We can spend a billion euros on acquisitions – he said at the club of economic journalists in Vienna.

Plater said that he was convinced that international expansion was the best way to create jobs in Austria and added that Austria was a small market which didn't allow for the concern to reach the size necessary to make it competitive.

– We are competing with T-Mobile and Drei, both of which are large companies – explained the CEO of Telekom Austria, a part of the Mexican mobile operator America Movil.

Plater emphasized that, without expanding, A1 Telekom Austria couldn't be successful and that the company needed to become relevant in Europe.

– If an opportunity for a purchase arises, A1 Telekom Austria will have no trouble securing a billion euros, without a capital increase – Plater emphasized.

The latest attempt at a sale of Telekom Srbija took place in 2015. The potential purchaser at the time was the American investment fund Apollo, which, unofficially, offered EUR 1.2 billion in a joint bid with Telekom Slovenija for 58% of Telekom Srbija. A1 Telekom Austria was not a candidate at the time, but it had been a potential purchaser several years before.


At the time, in 2011, Telekom Austria first offered EUR 950 million for 51% of the Serbian company and EUR 450 million for capital investments. It then raised the offer to EUR 1.1 billion, under the condition that the Commission for Protection of Competition allow A1 Telekom Austria to keep the ownership of the local operator Vip Mobile. As the then government was offering a majority package for a minimum of EUR 1.4 billion, the offer of the Austrian operator was declined.

Lower price?


Alejandro Plater reminded that Telekom Srbija and Telekom Slovenija had been slated for privatization on several occasions, but that the attempts failed due to the price.

– The purchasers' prices were always oriented towards the prices from five years ago, but those prices can no longer be reached – Plater pointed out.
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