Deutsche Telekom’s strategy in Central and Eastern Europe may be about to change.
On the face of it, the announcement that Hrvatski Telekom (HT) has agreed to buy a majority (76.53%) stake in its Montenegrin counterpart from Magyar Telekom looks little more than the shifting of Telekom’s assets in the region. However, there is more to it than meets the eye.
Firstly, local observers believe that HT is set to take over Magyar Telekom’s role as Deutsche Telekom’s main player in CEE. The Crnogorski Telekom deal is expected to receive regulatory approval by as soon as the end of this month and HT may then move to buy the incumbent in Macedonia, also owned by Magyar Telekom, later this year.
The view is that ultimately Deutsche Telekom intends to make HT the leading telco in the Adriatic region. At the same time, Magyar Telekom will become focused on its home (Hungarian) market, increasing its presence in such areas as the country’s mobile sector.
This ultimately raises the interesting question of whether HT will target Telekom Srbija, which is not a Deutsche Telekom-owned company, at some point in the future. Although the Serbian incumbent’s proposed privatisation, at the second attempt, was called off in December 2015 there is a view that it could still happen, even this year.
However, the prospect of the company being acquired by HT would be highly sensitive politically and meet with strong opposition. A direct bid by Deutsche Telekom, though still arguably unwelcome, would at least be more palatable.
Then there is also the question of Telekom Slovenije. Like its Serbian counterpart, it, too, suffered a failed privatisation in 2015 and has since pressed on with growing its business, moving into such areas as the sale of utilities. Interestingly, it has also expressed an interest in buying Telekom Srbija.
Telekom Slovenije could in due course also become a take-over target for HT as it expands to become a key regional player. HT may in addition seek to strengthen its presence in Bosnia & Herzegovina, where it co-owns the telco HT Mostar.
