Deutsche Telekom to buy Austrian rival for 1.9 bn euros

German telecoms giant Deutsche Telekom (IOB: 0MPH.IL - news) on Friday said it would buy Austrian cable provider UPC for 1.9 billion euros to boost its mobile and fixed-line offerings and take on market leader A1 Telekom Austria.

The $2.2-billion takeover by Deutsche Telekom's T-Mobile Austria unit will see the combined entity become a major provider of wireless and cable broadband, TV and mobile phone services, the German group said in a statement.

"The acquired cable network will be a perfect match with our best mobile network," said Srini Gopalan, a board member of Deutsche Telekom for Europe.

UPC Austria is owned by the Liberty Global (Frankfurt: A1W0FL - news) group and is the Alpine nation's largest cable operator covering 36 percent of households.

It is also Austria's leading provider of premium television content and the second-biggest broadband provider.

The takeover will see the combined company "become a strong converged challenger and alternative to the incumbent A1 Telekom Austria," the statement added.

Deutsche Telekom said it saw "significant" growth potential in the Austrian market, as the country gears up for super-fast 5G broadband technology.

The deal will group UPC's 1.5 million customers with T-Mobile Austria's 5.2 million and should lead to some 800 million euros in annual savings, the company said.

The transaction, which still needs regulatory approval, is expected to close in the second half of 2018.

Together, the two companies will have booked annual revenues of some 1.2 billion euros in 2017, according to Deutsche Telekom.

The purchase comes as Deutsche Telekom seeks to shrug off last month's failed merger talks between its T-Mobile division in the United States and local rival Sprint.

The tie-up would have dramatically changed the US wireless landscape, but the pair called off merger talks after failing to agree on mutually acceptable terms.

Source: AFP