Spectre of German expansion prompts monopoly concerns for Macedonian telecoms market

8 May 2008

Local industry watchers in Macedonia are watching Deutsche Telekom’s (DT’s) efforts to acquire Greek telco OTE with interest, amid concerns that such a move could unless checked, gift the German giant a near monopoly over the country’s fixed and mobile market. If DT completes on the deal, the German firm would then own two main mobile operators – the recently re-branded T-Mobile Macedonia (formerly MobiMak) and number two player Cosmofon, owned by OTE’s Cosmote unit. Taken together, the two operators control 92% of all mobile users in the country. DT also owns the fixed line incumbent T-Com Macedonia and would take ownership of Cosmofon’s WiMAX licences giving it a clear advantage in the wireless broadband market. Local newspaper Dnevnik says the country’s parliamentary commission for competition is monitoring the situation closely and if necessary, will take legal action. ‘If the new legal subject that is formed after the merger holds more than 45% of the market, the concentration would not be allowed,’ the head of the commission, Cedomir Kraljevski told the newspaper on Saturday. DT is reportedly near to completing a deal to buy a stake in OTE from the Greek government, with the two sides trying to hammer out details surrounding various issues including the exact level of management control to be handed to the German group.

DT wants to take a management role in OTE in return for buying a 5%-8% stake from the state for a price of between EUR26 and EUR28 a share. According to some sources the price will be higher than the EUR26 a share that DT has already agreed to pay Greek investment holding Marfin Investment Group (MIG) for a 19.99% stake in OTE (a total price of EUR2.55 billion), with the premium reflecting the change of management control. The Greek state currently holds 28.03% in the former monopoly, including a direct stake of 24.96% and an indirect 3.07% through the DEKA fund.

North Macedonia, Cosmote, Deutsche Telekom (DT), Makedonski Telekom (Telekom), ONE (incl. on.net and Cosmofon), T-Mobile Macedonia