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Deutsche Telekom continues push in central Europe by buying its own Czech subsidiary

The German telco is building out its central European portfolio, amid speculation further buyouts are on the way.
Written by Michiel van Blommestein, Contributor

Deutsche Telekom has acquired the remaining 39.23 percent of T-Mobile Czech Republic it doesn't already own.

The German giant has bought the T-Mobile Czech Republic shared for €800m from Mid Europa Partners, a private equity group. No regulatory approval is needed, so the deal will be closed before the end of this month.

Deutsche Telekom is planning to consolidate the offerings of fixed broadband provider GTS with T-Mobile in the region. Last year, Deutsche Telekom bought Poland based GTS Central Europe for €546m, getting 30,000 B2B customers in the region and making a grand entry into fixed broadband.

The investment is part of a power grab in Central European markets, or to put it another way: "The acquisition of the remaining shares is a natural step towards optimizing our portfolio and supports our transformation into the leading integrated Pan-European operator," Deutsche Telekom's board member for Europe and technology Claudia Nemat said.

"The Czech Republic is an important market for Deutsche Telekom due to its size and structure. With the ongoing integration of T-Systems Czech Republic and the planned combination with the Czech operations of GTS Group, T-Mobile Czech Republic is on a clear strategic path to enhance its fixed-line capabilities and foster its market position in B2B."

Speculation about Deutsche Telekom's next steps are not hard to come by. One theory is that Deutsche Telekom's Hungarian subsidiary, Magyar Telekom, might be next in line to join the fold, which would mean the Germany telco would have to buy 40.8 percent of shares there. The Slovak unit is also mentioned by various media, but a Deutsche Telekom spokesman told Bloomberg there are no concrete plans for further acquisitions as yet.

Entering the Czech market in 1996, T-Mobile had 5.7 million mobile customers and 119,000 landline connections at the end of the third quarter.

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