28 Dec 2008

Turk Telekom to grow business into Macedonia?

Looking back over some of the stories which popped up while I was away on holiday, I noticed that Global Mobile Daily picked up news of the Turkish incumbent fixed-line operator's interest in acquiring the 2nd-placed MNO in the small market of Macedonia (population approx 2 million). I am not clear to what extent any new owner (other interested parties seem to include Telekom Austria and Telekom Slovenije) would be able to grow the business. In addition to the Balkan country being a market of limited size, it is one for which our WCIS reports mobile penetration as 112.17% as of September 2008. Moreover, first-placed T-Mobile has established a commanding lead in terms of market share. According to WCIS, the Deutsche Telekom-aligned cellco owns 67.88% of subscriptions versus market shares of 32.13% and 12.16% for Cosmofon and VIP respectively.

VIP is part of the mobilkom austria group, itself a subsidiary of Telekom Austria - so if the Austrian incumbent's reported interest in Cosmofon is for real, I would assume that they would be thinking in terms of consolidating the Macedonian market down to two players.

Cosmofon's current owner is the Cosmote group, a company controlled by Greek incumbent carrier OTE. Assuming that the Greek group welcomes the interest being shown in its Macedonian outpost, this seems to represent another retreat from an East European market, OTE having not long quit Armenia. OTE sold its interest in Armentel, that country's then-monopolist wireline carrier (and associated mobile business) to Vimpelcom of Russia in late 2006.

If the Cosmofon story has played out by the end of March, and if Turk Telekom prevails, I daresay delegates at our Eurasia Com event in Istanbul will be keen to ask the company's CEO Dr. Paul Doany where the acquisition fits into his broader strategy.