The Croatian Competition Agency (AZTN) has said it cannot permit incumbent T-Hrvatski Telekom’s (T-HT’s) proposed takeover of struggling number two fixed-line operator Optima Telekom (OT).
The regulator said in a statement that it has concluded…
The Croatian Competition Agency (AZTN) has said it cannot permit incumbent T-Hrvatski Telekom’s (T-HT’s) proposed takeover of struggling number two fixed-line operator Optima Telekom (OT).
The regulator said in a statement that it has concluded that, there are currently “no arguments” that would convince it the planned takeover is permissible.
AZTN noted that T-HT is already dominant in the fixed-line market and allowing the takeover to go ahead would increase its market share to 60-70% in some markets and to more than 80% in others.
The watchdog said that, while it is sensitive to the time pressure that OT, currently in pre-bankruptcy settlement proceedings, is under to repay creditors, its task is to preserve and improve competition in the market in the interests of consumers.
T-HT notified AZTN of its intention to acquire OT on Monday (1 July), saying it was based on the smaller operator’s plan for its financial and operational restructuring. The plan proposes that T-HT, as one of OT’s largest creditors, become its strategic partner.
AZTN also noted that OT should have notified it of its restructuring plan, which effectively includes the proposed T-HT takeover, sooner, as required by competition legislation.
OT has posted negative financial results since its founding in 2004 despite increasing its customer base.
The telco’s debt and liquidity problems prompted it to initiate pre-bankruptcy settlement proceedings in April this year in an effort to stave off bankruptcy and resume normal business operations.
Despite this, OT reported EBITDA of HRK26.5m for Q1 2013, up 23% from the same period in 2012.
