Orange will take control of about 881,000 customers buying fixed and mobile service bundles
French mobile operator Orange is purchasing a 54% stake in Telekom Romania Communications (TRC) from Deutsche Telekom’s OTE. As a result, Orange has bought its way into a business that serves about 930,000 broadband and 1.2 million TV customers and generates $739 million in sales annually.
According to Orange Deputy Chief Executive Mari-Noëlle Jégo-Laveissière, the acquisition of TRC is “an important step to accelerate [its]convergence strategy in Europe.”
Convergence is considered to be critical for Orange in the Romanian market because its three rivals — Telekom Romania, Digi Communications and Vodafone — have fixed-line assets, which prior to this agreement, is not something that Orange could claim. The risk, of course, was that customers getting just mobile services from Orange might become tempted by fixed and mobile service bundles. Now, Orange will take control of about 881,000 customers buying fixed and mobile services on the same plan.
For Deutsche Telekom, the decision to divest in Romanian is said to be motivated by a desire to instead focus on establishing 5G services in Greece.
“The sale of Telekom Romania is a strategic decision in the context of OTE Group’s redefined priorities and growth plans,” OTE’s Chief Executive Michael Tsamaz said.
The deal, which gives the Romanian unit an enterprise value of 497 million euros ($591.1 million), is expected to be completed in the second half of 2021.
