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KPN inks fibre deal with Telekom Austria as clouds gather around Slim's takeover

The two telcos have agreed an interconnection deal as the KPN Foundation demands answers from América Móvil on its proposed takeover of KPN.
Written by Martin Gijzemijter, Contributor

Telekom Austria and Dutch telco KPN have reached an agreement to join infrastructure forces.

By agreeing an interconnection deal for their fibre networks, both telcos have more than doubled the range of their infrastructure, allowing both the Dutch and Austrian company to serve corporate customers in a total of 35 countries, the companies said on Wednesday.

The partnership gives Telekom Austria Group a local presence in Western Europe via KPN International's backbone, and vice versa KPN International will be able to take advanrage of the local presence Telekom Austria Group has across Central and Eastern Europe.

Takeover bid

The announcement comes just days after Mexican telco América Móvil announced that it would pursue a full takeover of KPN, in which it currently has a 29.77 percent stake.

It is generally believed that the reason behind the proposed takeover bid is that América Móvil, owned by billionaire Carlos Slim, will be able to gain a majority stake which allows it to block the proposed acquisition of E-Plus, a KPN-subsidiary, by Telefonica.

While it would seem Slim considers E-Plus an asset too valuable to sell, in the bid announcement, he said the takeover bid was intended to "facilitate greater operational cooperation and coordination between the two companies, to exploit all areas for potential partnerships andtointensify the realisation of synergy potential for both companies".

Synergy demonstrated

The partnership between KPN and Telekom Austria — a company that América Móvil has a 25 percent stake in — seems to be in line with the statement.

Although a KPN spokesperson refused to attribute the network agreement to recent developments — stating that these kinds of agreements are common among telcos — a Telekom Austria spokesman told press agency Bloomberg that the agreement is most definitely related to the shared shareholder of both companies.

Voting stock

Meanwhile, the KPN Foundation — an organisation linked to the telco that has the power to prevent a takeover of the Dutch operator from going through — said that América Móvil should provide more information about its intentions, according to reports.  The foundation said there are uncertainties around the bid, including around the future of E-Plus.

If Slim's company doesn’t respond appropriately to the foundation's request for more details, the organisation might choose to invoke its option to acquire voting stock, in which case América Móvil would need the support every other KPN shareholder to gain its desired majority stake.

In addition, the unrest caused by América Móvil decision to launch a full takeover bid for KPN has reignited rumours that the Mexican telco is also planning on launching a similar takeover bid for Austria Telekom as well. Both América Móvil and Telekom Austria refused to comment on the matter.

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