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.