Zapp becomes part of Cosmote

1 Jul 2009

Balkans mobile group Cosmote, a subsidiary of Greek telco OTE, yesterday signed an agreement with Saudi Oger to buy Telemobil, the Romanian mobile network operator which trades under the name Zapp, for a cash consideration of EUR61 million (USD85.7 million) plus debts and other liabilities estimated at EUR146 million. Zapp is Romania’s oldest cellco, having launched in 1993, and operates 3G/3.5G services over twin networks based on CDMA2000 1xEV-DO/Rev A and W-CDMA/HSDPA technologies (the latter covering 23 cities). However, according to TeleGeography’s GlobalComms database it languishes in fifth place in the market following the rapid subscriber growth of newcomer Romania Cable Systems (RCS&RDS). A press release from OTE says that Zapp had revenues of EUR61 million in 2008, by the end of which year it had a post-paid subscriber base of 374,000; the company’s debts and liabilities mainly relate to the parallel rollouts of its two 3G systems.

OTE’s existing mobile subsidiary in the country, Cosmote Romania, currently lacks a 2.1GHz 3G licence, and lies in third place in the market with 6.1 million subscribers at the end of March 2009, or less than a 22% share, behind Orange Romania and Vodafone Romania. Telemobil (Zapp) is currently owned by Inquam Romania, which is itself wholly owned by Saudi Oger, which upped its stake from 50% in January 2008, buying a 50% interest from US equipment manufacturer Qualcomm. There has been no announcement as to whether the Zapp brand name will remain in use, but Cosmote Romania is expected to merge the business with its own operations. The acquisition is subject, among other conditions, to the approval of the relevant Romanian authorities.