Deutsche Telekom AG (DTE) seeks to become a dominant player in all of its markets in Central and Eastern Europe by 2018, as the company purchases assets and bolsters its networks.
Deutsche Telekom has again begun to buy assets outside Germany, after CEO Timotheus Hoettges sees improving demand in the region between the Baltic Sea and Crete. In its pursuit of dominance, the company will need to expand its market share in countries including Poland and Romania, while challenging competitors such as Orange SA and Polkomtel Sp. z o.o.
Earlier this week the company stroke a deal to buy out minority shareholders of its unit in the Czech Republic at the amount of 1.1 billion USD. Deutsche Telekom also made a proposal to purchase an additional 10% stake in Hellenic Telecommunications Organization SA from Greece, according to Bloomberg News. Claudia Nemat, who is in charge of companys European operations outside Germany, refused to comment on the matter for further acquisitions.
Macedonia is the first European market, which Deutsche Telekom enters, where custromers both on landlines and mobile links send voice and data traffic with the help of an unified digital infrastructure. The transition to “all-IP” network is expected to increase voice quality and also to allow customers to boost their connection speeds and lift their data limits immediately. Users will also be able to instantly book and receive extra services such as music streaming.
“It’s a credible strategy that leaves room to significantly cut costs”, Heike Pauls, an analyst at Commerzbank said, cited by Bloomberg. This IP network has the potential to make Deutsche Telekom “less vulnerable to macroeconomic elements as it has an excellent way to reposition assets. The target of 2018 is realistic”, he added.
The company, based in Bonn, is adding landlines in countries such as Poland and the Czech Republic in accordance with an agreement, reached in November, to purchase the Warsaw-based GTS Central Europe.
In December 2012, Deutsche Telekoms units in Greece, Hungary, Croatia and Macedonia alone had dominant presence in their local markets, a presentation by the company itself revealed.
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