Deutsche Telekom to bid for Telcom Italia?

5 Apr 2007

According to reports in the Italian press, German incumbent Deutsche Telekom (DT) is considering a bid for a two-thirds stake of Olimpia, a holding company that owns 18% of DT’s Italian counterpart, Telecom Italia (TI). Other potential suitors for Olimpia that have emerged recently are European giants Telefónica and France Telecom, and a joint bid from US-based AT&T and Mexican outfit Telmex. DT has made no comment on the latest speculation.

Speculation has also arisen as to the fate of Telecom Argentina (TA) should AT&T and Telmex succeed in their bid for Olimpia. TA, the former monopoly wireline provider in the north of Argentina, is 55%-owned by Nortel Inversora, in which TI holds a 50% stake, and an option to buy a further 48%. Should Telmex acquire a share of TI, then it would by default acquire a share of TA, which competes with Telmex-owned CTI Móvil in Argentina’s wireless market through its subsidiary Telecom Personal. At the end of 2006, Telecom Personal and CTI Móvil accounted for 60% of subscribers between them, and speculators think that the Argentine government may require either CTI or Personal to be sold to avoid market dominance by Telmex’s cellular arm, America Móvil.

Argentina, Germany, Italy, Deutsche Telekom (DT), Telecom Argentina (incl. Cablevision), Telecom Italia (TIM)