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Deutsche Telekom on the hunt for fixed-line operator in Poland

  • Deutsche Telekom (DTEGF.PK) is seeking to buy a fixed-line operator in Poland to accelerate and diversify revenue, Bloomberg reports. The company began building a landline network for business customers more than a year ago, and may purchase an operator with "a big scale of operations," said T-Mobile Polska CEO Miroslav Rakowski. "[S]omething tells me the chances are very high" that a decision will be made this year, he continued.
  • One potential target is GTS Central Europe, which provides 38K business customers phone and Internet services. Deutsche is competing with Level 3 Communications for GTS in a deal that may fetch upwards of $680M, according to 2 sources.
  • Deutsche hopes a phone-line business will cauterize recent revenue declines (-7% last year) in its T-Mobile Polska business caused by increased competition and regulator-mandated price cuts.
  • Another potential avenue of diversification is high-speed mobile Internet offerings. Deutsche intends to bid for more spectrum this year after purchasing 1.8K MHz in Feb.
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