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Deutsche Telekom bolsters B2B with GTS Central Europe buy

The German incumbent has snapped up the enterprise network services company for €546m.
Written by Michiel van Blommestein, Contributor

In line with th rumours going around earlier this year, Deutsche Telekom has bought GTS Central Europe, a provider of B2B network services.

For GTS Central Europe's €546m price tag, Deutsche Telekom gets access to the core markets in Central and Eastern Europe: Poland, Romania, Hungary, and the Czech Republic.

Warsaw-based GTS Central Europe deals in fibre optic and datacentre networks in Eastern Central Europe. It runs 14 datacentres with 13,000 square meters of space between them, and offers telecoms services including VPN, leased lines, cloud storageand datacentre coloation. The company also owns fibre optic fixed lines in some of the larger cities in the area.

According to Deutsche Telekom, acquiring GTS Central Europe is primarily an effort to add to the company's mobile network in the region and also start offering fixed line services.

Bulking up its enterprise customer list was another reason for the purchase. The acquisition brings 38,000 business customers to Deutsche Telekom's portfolio, including many in the large enterprise segment and public sector, including Poland's rail transport company PKP.

GTS' 2012 revenues were €347m, while its EBITDA was €87m, Deutsche Telekom said. The figures exclude the Slovak branch of GTS, which will stay in the hands of the consortium that previously owned the group.

According to a quick calculation made by Polish newspaper Rzeczpospolita, revenues including Slovakia would have totalled €387m, meaning the Slovak business was by far the smallest territoriy within the group.

Deutsche Telekom faced competition from Level 3 Communications in the race to acquire GTS Central Europe, Bloomberg reported on Monday, while Poland's second fixed line carrier Netia has also shown an interest in the outfit.

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