Deutsche Telekom [NYSE: DT] said last night that it had reached agreement to take full control of Poland’s leading mobile operator Polska Telefonia Cyfrowa (PTC) after its offer of USD1.1 billion was accepted by Polish utility company Elektrim and French media conglomerate Vivendi Universal for their combined 51% stake. The German PTO had been in talks with PTC’s former owners for several weeks. Its initial bid of USD1 billion was accepted by Vivendi but rejected by the financially troubled Elektrim, which came close to bankruptcy in 2001 and has since struggled with substantial debts accrued during its partial restructuring. The deal, which marks progress in Deutsche Telekom’s desire to increase its presence in Eastern Europe, is set to be ratified by the end of this week and completed by the start of 2004.
PTC is the largest mobile operator in central and eastern Europe. Having launched GSM services in September 1996, in 1999 it was awarded a 15-year non-exclusive DCS-1800 licence. By March 2003 its network covered 96.11% of Poland’s territory and 99.55% of the population. Despite the country’s unfavourable economic conditions, between March 2002 and March 2003 PTC increased its customer base by 31.9% to 5,240,373, clinging to its dominant market share of 35.4%. Post-paid subscribership rose by 11.7% to 2,624,967, whilst a 61.2% surge in the number of pre-paid users made up the majority of the 2.6 million acquisitions reported. By the end of June 2003 PTC had added a further 360,000 subscribers to take its share of the market to 36.2%.
Having been EBITDA positive within eight months of launch, PTC has returned a series of buoyant financial results in recent years, During 2002 its revenues grew by 13.5% year-on-year to USD1.3 billion with a gross profit increase of 25.3%. In the first quarter of 2003 it added 554,000 new subscribers and recorded a net profit of USD11.42 million.