Three investors interested in acquiring Czech Telecom

04-04-2002

Three consortia have placed bids for a majority stake in the Czech Republic's dominant telecommunications operator Cesky Telecom in one of the last pending large privatisations in the country.

The three consortia were not identified but industry sources told Reuters that Deutsche Telekom had abandoned plans to place a bid.

Orange, the mobile phone group owned by France Telecom, remains in the running, and some sources said another European telecoms carrier had been preparing to bid.

However, it is private equity firms that are expected to lead the bidding and they may team up with carriers in order to meet government requirements for a successful bid.

Yet as Thursday's bid deadline passed, some analysts said the government may end up hanging onto its stake until autumn, because offers were likely to come in about 1.4 billion USD - far short of official expectations of at least 2.25 billion dollars.

Observers say the Czech government is not in a hurry with the sale and may postpone the privatisation. Originally, it had been expected to reach a decision on the sale on April 10.

The government's 51-percent state stake may be sold with an additional 27 percent owned by Dutch carrier KPN Telecom and Swisscom, both of which say they want to sell unless becoming buyers would improve their chances for a better sale in the longer term.

In the meantime, Czech Telecom reported a five percent fall in annual net profit to 6.07 billion Czech crowns (170 million USD) on a nine percent drop in revenues from fixed-line operations to 27.5 billion crowns.

The sale of Czech Telecom is being closely watched by domestic alternative telecommunication operators, as it should help accelerate market liberalisation.

04-04-2002