Czech-ered flag in sight in PTO’s quest to buy mobile unit

27 Mar 2003

It has emerged that Cesky Telecom [SPTTq.L] has resumed talks with AT&T Wireless [NYSE:AWE] and Verizon Communications [NYSE:VZ] to acquire the 49% that it does not already own of domestic mobile operator Eurotel Prague. AT&T Wireless and Verizon, which hold their joint stake through Atlantic West, began negotiating with the Czech PTO in 2001, although talks were put on ice in November that year after the parties failed to agree on a valuation for the cellco. However, local sources are now saying that a USD1.3 billion deal could be brokered by May. The cash would be welcome news for the US pair; AT&T Wireless is currently selling off a number of international assets in a bid to raise funds to pay for network upgrades in its home market, while Verizon is struggling to reduce a USD54 billion debt burden. Becoming the sole owner of Eurotel Prague could be an important step for Cesky Telecom on the road to privatisation. The government has been attempting to offload a majority stake in the telco since mid-2001 but has failed on a number of occasions, the most recent of which being in November 2002 when it rejected an offer from a consortium comprising Deutsche Bank and Denmark’s TDC. The government claims that it remains committed to finding a buyer for Cesky Telecom and hopes that 100% ownership of the Czech Republic’s leading cellco will attract potential investors and help boost the purchase price.

Czech Republic
CIT's Yearbook of Eastern European Telecommunications