Bulgarian number two acquired by Telenor

Scandinavian operating group Telenor has stated that it will acquire the number two Bulgarian operator, Globul, for €717 million. With 4.6 million connections, Globul has a market share of around 37%.

The Bulgarian operator – along with electronics retailer Germanos Bulgaria – is owned by Greek telecoms group OTE. Both OTE subsidiaries will be bought by Telenor, which has evidently outbid Turk Telekom; the Turkish operator had lodged binding bids for both companies.

Globul has been present in the Bulgarian market for twelve years, and is the second largest player after Telekom Austria’s M-Tel, which has around 45% market share. Together with Germanos Bulgaria, the operator brought in €378 million across 2012, with EBITDA of €135 million.

Telenor already has operations in Hungary, Serbia and Montenegro. The Scandinavian group has stated its belief that its new Bulgarian operation will complement these, with president and CEO Jon Fredrik Baksaas saying: “Based on our experience in Telenor’s well-performing operations in the region, we strongly believe that we will be able to create value in the Bulgarian market. By contributing with our scale and experience to Globul’s competence and market knowledge, we can offer even better quality and more advanced services to Bulgarian customers.”

However, Ovum analyst Jeremy Green noted: “Bulgaria is a largely saturated market (141% penetration) with little prospects for revenue growth. It is possible that Telenor will be able to shape and improve Globul’s market share and position, but there is no guarantee of this, and these sort of gains are hard to sustain in most markets. The largest competitor, Mtel, is also owned by a European operator group, so growth at its expense will not be easy.”

The asset sale allows OTE to reduce some of its debt and refocus on its home market as Greece’s recession continues to bite. In early 2011 the operator group’s debt was over €4 billion; this has now been halved.

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