Romania’s major telecom group Digi Communications (BVB: DIGI, Digi) reached an agreement to get indirect majority control of Telekom Romania Mobile – the local mobile operator and the last asset of the Greek group OTE that took over the country’s incumbent telecom group Romtelecom in a process initiated in 1998.
“Competition-wise, it’s more complicated because Digi is a large player in the market,” commented Bogdan Chiritoiu, the head of the national competition body Consiliul Concurentei, quoted by Hotnews.ro.
Under the new agreement announced by Digi on May 27, 2024, West Network Invest, an investment vehicle majority-owned by Digi Romania (DIGI’s national branch) and minority-owned by Clever Media group (owned by local businessman Adrian Tomsa), will take over a 99.99% stake in Telekom Romania Mobile Communications (Telekom Romania Mobile) from Hellenic Telecommunications Organization (OTE).
According to the agreement between the shareholders of West Network Invest, in the event the transaction is completed, Telekom Romania Mobile will remain in the market as an independent telecommunications operator (but nothing is specified about the brand).
The deal is a second version of the preliminary agreement announced last November by OTE.
Last year on November 21, OTE announced in a note to investors that it was in talks to sell the mobile operator to Quantum Projects Group – a vehicle owned by Romanian businessman Adrian Tomsa, who, under the final agreement announced by the Romanian telecom group Digi on May 27 is only a minority partner of Digi in the takeover vehicle.
The parties signed a memorandum of understanding to facilitate the process and submitted it for approval to the competent Romanian authorities, Digi Communications announced.
On November 23, Tomsa expressed “confidence” that he would obtain the necessary approvals from the National Security Council (CSAT) and the competition body for the transaction.
“We trust that the institutions of the Romanian state will favourably analyse this transaction as soon as possible, as all the necessary documents have already been submitted in this regard,” he said at that time.
It is unclear whether this was an obstacle, or the obstacle was of a financial nature – or maybe the partnership with Digi was a better option negotiated by Tomsa.
Tomsa has pledged to transform Telekom Romania Mobile into “a local, dynamic, safe operator, dedicated to all domestic residential customers.” The new agreement does not invalidate such plans.
Telekom Romania Mobile reported EUR 261 million in revenues and EUR 16 million net losses in 2023.
The company, which now has 3.66 million active SIMs, of which 1.93 million are post-paid subscribers, has reported net losses in nine of the past ten years. In total, there are nearly 24 million active SIMs, of which two-thirds are for post-paid services.
On November 6, 2020, OTE agreed to sell the 54% stake in the fixed network company Telekom Romania Communications to Orange Romania for EUR 295 million (the Romanian state owns the remaining 46%).
In order for the transaction to be approved by the authorities, OTE has committed to buy the remaining 30% of shares in Telekom Romania Mobile. The transaction was completed in July 2021.
iulian@romania-insider.com
(Photo source: Digi)
