Mobilkom Expands Empire

Austria's largest mobile operator Mobilkom Austria AG & Co. KG just can't stop invading Eastern European countries. Mobilkom is rapidly expanding its empire in the region and mobile broadband services at home.

With 10.2 million subscribers, Mobilkom is one of Europe's mid-sized operators. The operator reported €2.9 billion (US$3.9 billion) in revenues in 2006, which is an increase of 16.8 percent from €2.5 billion ($3.4 billion) reported in 2005. (See Telekom Austria Reports 06 and Telekom Austria Updates.)

Mobilkom recently added Serbia and Macedonia to its Eastern European holdings by acquiring the third GSM licenses in those countries. In Serbia, commercial services will launch in June and by this fall in Macedonia. These markets will join Bulgaria, Croatia, Slovenia, and Liechtenstein, where Mobilkom has wholly-owned subsidiaries. (See TA Wins License and Telekom Austria Wins License.)

But that's not enough for the Austrians. Mobilkom is hungry for more acquisitions in the region. In a recent interview with Unstrung, Mobilkom's chief marketing officer Hannes Ametsreiter said the company is now looking at Bosnia and that its parent company, Telekom Austria AG (NYSE: TKA; Vienna: TKA), remains interested in acquiring a stake in Greek national operator OTE S.A. A share in OTE would be strategically important for Telekom Austria because the Greek operator has operations in Albania, Romania, and Bulgaria. (See Eurobites: Upheaval, M&A, and Disaster and Eurobites: M&A Hotbed.)

"[OTE] would complete a footprint," says Ametsreiter. "But it now depends on the government and what its plans are."

The Greek government owns 38.7 percent of OTE. Some time this year, the government plans to sell a stake up to 20 percent and hopes to raise up to €1.5 billion (US$2 billion) from the sale.

It's not just the high-growth potential that attracts Mobilkom to Eastern Europe. Ametsreiter says that these markets are great opportunities to develop mobile data services, particularly where mobile connections can substitute fixed-line broadband connections.

In Croatia, for example, Mobilkom's subsidiary VIPnet is the number-two mobile operator with 1.9 million subscribers. In September, VIPnet launched a fixed-mobile substitution (FMS) service based on the Vodafone Homebox. [Vodafone Group plc (NYSE: VOD) and Telekom Austria signed a partnership agreement in January 2003 for joint product development, global account management and product procurement.]

The Vodafone Homebox houses a SIM card and uses the HSDPA network to deliver 384-Kbit/s Internet access, cheap voice calls, and mobile connectivity. Users can keep their fixed-line numbers, but they no longer need the fixed line, which Ametsreiter describes as the "perfect situation for a challenger brand."

Ametsreiter says the home gateways sold out in just one week, but subscribers number in the thousands. Vipnet had to issue a statement in October asking customers to be patient as they could not meet the demand for the Homeboxes.

Fixed-line operators, naturally, complained to the regulator when this product was first launched.

Continue to Page Two

1 of 2
Next Page
alexx 12/5/2012 | 3:10:07 PM
re: Mobilkom Expands Empire OTE is also present in Romania and Macedonia via its subsidiary Cosmote
Sign In