Romtelecom has come a long way since it launched its highly successful DTH platform Dolce back in late 2006.
Now the second largest provider of pay-TV services in Romania, its position in the marketplace was further strengthened earlier this week by the completion of a deal to acquire Boom TV, another DTH platform, from the DTH Television Group.
However, the issue of Romtelecom’s own ownership has also come under the spotlight this week, with the Greek incumbent OTE, which is backed by Deutsche Telekom, announcing that it will now not seek to buy the 46% in Romtelecom it does not already own from the Romanian state.
OTE’s decision to pull out of a possible deal was based first and foremost on the difficult economic climate in Greece and Romania. Indeed, Roland Mahler, the head of Telekom’s European operations outside Germany, has been quoted as saying the situation is so severe that the group is unlikely to see any revenue growth in the two markets until 2013.
On the other hand, it’s no secret that the two parties were some distance apart in their valuation of the 46% stake. While the Romanian state wanted to raise around €1 billion, Telekom was unlikely to want to pay much more than €350 million.
While OTE has not ruled the possibility of revisiting a deal once the economic climate improves, it has also, though much sooner, suggested the merger of Romtelecom with Cosmote, the mobile operator jointly owned by OTE and Romtelecom. Such a move would, in the Greek telco’s view, represent good value for the shareholders of both companies.
Although the Romanian government will respond to OTE’s decision shortly, it is unlikely to rush into any decisions about what now to do with the state’s stake in Romtelecom. It has nevertheless already ruled out selling it to RCS&RDS.
