Telekom Austria has agreed to buy two cable operators in Bulgaria for EUR72 million (USD94 million) to add to its wireless network operator in the eastern European nation. The purchase of Megalan Network and Spectrum Net will be funded out of existing cash flow, with the final EUR14.5 million payment due in 2011 depending on the units’ performance, the Vienna-based company said today in a statement.
The acquisition will allow MobilTel (M-Tel), the Bulgarian mobile phone company that Telekom Austria bought in 2005, to ‘become a fully integrated operator and to participate in the strong anticipated growth’ of fixed broadband, IPTV and related products, Chief Executive Officer Hannes Ametsreiter said in the statement.
Taken together, the two cable operators registered an earnings before interest, taxes, depreciation and amortisation (EBITDA) of EUR7 million in 2009, Telekom Austria said. The figure is expected to rise to EUR9.6 million in 2010, with further growth being anticipated in the future. Megalan and Spectrum Net will operate as separate entities for approximately 18 months, although product bundles under the M-Tel brand will be launched during this year. Megalan is currently a provider of residential broadband in Sofia and offers broadband as well as IPTV services, while Spectrum Net offers broadband and voice services to business customers in Bulgaria’s major cities. Combined the two companies had 85,400 connected households at the end of 2009.