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Telekom Austria Acquires Largest Czech ISP

Telekom Austria, Austrian incumbent telecommunication operator, recently acquired Czech On Line, the largest Czech Internet access provider.

Terms of the deal were not disclosed.

Czech On Line was established in 1995 and gradually became the largest Czech ISP. It claims to have total number of 150,000 users at the moment, and though this number cannot be checked from any independent source, Czech Internet experts agree it is more or less correct. In August 1999, Czech On Line as the first among Czech ISPs started to offer free access to the Internet under the name VOLny.cz. The offer was very successful; the number of users gained twofold at least. Several other Czech ISPs followed with similar offers but none of them didn't match the success of Czech On Line.

"This is much the largest Internet transaction in the Central and eastern Europe," said Jaroslav Horak, DBG's CEO. "Czech On Line will be enabled to improve and broaden it portfolio of services thanks to the acquisition."

Local analysts estimate the price tag above 3 billion Czech crowns (US $80 million), some of them talk even about the price around 5 billion CZK (US $130 million) on the basis of analogy with previous similar acquisitions, where the price was fixed roughly as $1,000 per user.

Telekom Austria had never before invested into any foreign company, but now is in intensive search for investment possibilities in several neighboring countries. It is on the short list for acquisition of 51 percent stake in Slovak telecommunication operator Slovenske telekomunikacie.

"We have entered Czech Internet and telecommunication market vigorously, since it is very dynamic," said Filippo Porcacchia, Telekom Austria's director for international business development.