Deutsche Telekom's plans for Romania moving into standby mode

Deutsche Telekom AG, the biggest telecommunication operator in Europe said at the end of last week in Bonn, Germany that there was no concrete plan for Romanian telecom market – where DT AG is indirectly active via OTE group that holds 70% stake in Cosmote Romania and 54% in Romtelecom.

Romtelecom and Cosmote will not merge, but will still deliver joint services

The company did not disclose any detail on its plans to pump additional cash in south-East European countries, including Romania. “However, this is why they selected me to guide the group’s operations in this region”, said Guido Kerkhoff (photo), responsible for DT’s activities in South Eastern Europe.

As Romtelecom is held by Greek-based OTE, same as Bulgaria’s Globul and AMC, Deutsche Telekom could not involve in operations in Romania, without a prior agreement with the Greek group, said Panagis Vourloumis, CEO and Chairman of OTE.

Romtelecom and Cosmote will not merge, but they will continue the tradition and deliver joint services. They will not be rebranded, and Cosmote will not become T-Mobile as it was rumored a while ago. As for the acquisition of Telemobil, the representatives of Deutsche Telekom and OTE refused to comment.

As for the relation between the two companies, Vourloumis said: “There are positive intentions on both sides, in order to assess the problems that call for immediate solution”.

According to Wolfram Puschner, Head of Global Networks DT, the partnership between the two companies will bring a set of benefits, such as a better geographical vision and expertise and a broader expansion of Deutsche Telekom across the world, and focus on Balkans and Mediterranean.

Deutsche Telekom and OTE have been officially interconnected at the global headquarters in Frankfurt, operated by DT.

The agreement between the two parties was concluded after Deutsche Telekom’s buyout of 25% stake in OTE last year.

The partnership is aimed to strengthen the position in data traffic via submarine cables, as DT operates a large number of cables in Atlantic and North Sea, while OTE in Mediterranean. Furthermore, the agreement will enable a comprehensive investment policy in large-transport capacity networks, DT planning to pierce the Middle East market.

The financial results of OTE will be embedded in Deutsche Telekom’s earning reports as of first quarter this year.

The preliminary results reported by DT in 2008 mark a 15-bln euro profit in United States and 28.9 bln euro in Germany. Overall, Deutsche Telekom’s revenues dropped 1.4% in 2008, down to 61.7 bln euros, versus 62.5 bln euros a year earlier.

The annual earning report will be officially made public on March 27, 2009.

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