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Europe Market Perspective / Vol. 8, Issue 29, Edition 9 Product Image

Europe Market Perspective / Vol. 8, Issue 29, Edition 9

  • ID: 662220
  • September 2008
  • Region: Europe
  • Pyramid Research, Inc

Telecom Austria’s Move in Serbia and Macedonia to Pay Off in Long Term

In addition to its operations in Slovenia, Croatia and Bulgaria, Telecom Austria in 2007 has expanded its operations in Southeastern Europe by entering Serbia and Macedonia (see Exhibit 1). However, several quarters later, in its H1 2008 operational results report, Telecom Austria announced that both its Serbian subsidiary Vip mobile and its Macedonian subsidiary Vip operator have once again recorded negative EBITDA figures. This poses the questions of whether Telecom Austria’s regional expansion into Serbia and Macedonia was a good strategic move and whether its investments in Serbia and Macedonia will eventually pay off. The author believes that Telecom Austria’s expansion into Southeastern European is a strategic move that will improve its competitive positioning in the region, albeit only in the medium to long term. Reasons include Telecom Austria’s solid financial situation and access to capital, regional synergies and the mobile service revenue growth we forecast for the Serbian and Macedonian mobile markets.

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