Deutsche Telekom, which is conducting a strategic review, is working on an overhaul of its Eastern European activities that could lead to the sale of its Czech unit, according to a Wall Street Journal (WSJ) report.
A key consideration is whether or not Deutsche Telekom should hang on to mobile-only operations, or complement them with fixed-line assets.
As a result, say WSJ sources, Deutsche Telekom’s 61 per cent stake in T-Mobile Czech Republic has come under the spotlight as the German giant seeks to streamline its Eastern European operations.
Along with the country’s other network operators, T-Mobile has voiced concern that CTU, the Czech telecoms regulator, is reserving 800MHz spectrum for a new entrant in a bid to boost competition in the provision of LTE-based services. A multi-band spectrum auction (800MHz, 1800MHz and 2.6GHz) is scheduled by the end of the year.
However, according to the WSJ report, Deutsche Telekom’s CFO, Timotheus Höttges – who replaces Rene Obermann as chief executive at the end of the year – may well hold on to the unit in order to maintain an international presence.
Deutsche Telekom valued its Czech T-Mobile stake at €1.75 billion at the end of last year.
Another option under review, according to WSJ sources, is the purchase of a fixed-line operator to beef up Deutsche Telekom’s Eastern European position. GTS Central Europe and Netia are two fixed-line companies that Deutsche Telekom has reportedly held talks with.
The WSJ report indicates, however, that Deutsche Telekom’s interest in GTS Europe has waned of late, boosting the chances of a move on Netia.
Deutsche Telekom’s management and supervisory boards are scheduled to meet in Poland next week to discuss group strategy further.
In related Czech Republic news, Reuters reported an announcement by Telefonica on Thursday (29 August) that it had launched talks with T-Mobile about consolidating their 2G and 3G networks across the Czech Republic.
A Telefonica spokesman said the two firms would split up the country into two geographical areas, each covered by one of the operators, to make cost savings. It would involve thousands of transmission stations, he added.
The Czech unit of the Spanish giant has already gained network-sharing experience with T-Mobile, partnering on 3G coverage in rural areas since 2011.
Earlier this month, Vodafone Czech Republic was reportedly in advanced discussions with Telefonica’s Czech unit to share passive infrastructure. According to internal company documents seen by Mlada Fronta Dnes, a local newspaper, the two operators were planning to create a joint venture (it is not clear if Telefonica’s network-sharing talks with T-Mobile mean discussions with Vodafone have floundered.)
As of end-June 2013, according to figures from GSMA Intelligence, T-Mobile had 5.5 million subscribers, followed by Telefonica Czech Republic (just over 5 million). Vodafone occupies third position with 3.3 million subscribers.
Far behind in fourth place lies U:fon (Mobilkom), a 3G operator using CDMA technology, with 125,000 subscribers.