Analysis: Turk Telekom’s recent international acquisition broadens its horizons
Turk Telekom’s recent acquisition of Invitel International, since rebranded as PanTel, was finalised on October 7 2010, and represents a significant development for both companies.
For Turk Telekom, the purchase marks its rst major step into the international telecoms market. Turk Telekom has been through a period of significant expansion for the last few years, but had previously focussed its activities within Turkey’s borders, forging affiliations with nine domestic companies. The acquisition of PanTel, which owns a 27,000km fibre-optic network across 16 countries in central and eastern Europe, will allow Turk Telekom to reach a much broader audience.
PanTel, which will retain its head office in Hungary, should also bene t from the acquisition. Over the last two years, the business has been making inroads into the Turkish market, expanding its network to include over 2,000km of fibre connecting Istanbul, Izmir, Kutahya and Ankara. The purchase will give PanTel rapid and complete access to the Turkish telecoms market. Gregg Betz, CEO of PanTel, speaking of the impact the acquisition will have on the business, said: “Now it’s time for us to get really focussed on the market and the opportunities going forward, especially opportunities in the Middle East and the Caucasus regions.” The countries bordering on Turkey are likely to be the first targets for the expansion of PanTel’s international infrastructure, with capabilities for serving customers further east.
As well as an opportunity to extend their networks, both businesses seem eager to capitalise on their strategic position as a gateway between the east and west. Mehmet C Toros, senior vice president of Turk Telekom, said: “Geographically, we are in a very good position between Asia and Europe, and we have a reliable network and a reliable relationship with our neighbouring countries.” Turk Telekom has been clear in its intentions, stating in its 2010 Q3 financial report: “We aim to become a significant alternative in data communication between the Far East, Middle East and Europe with PanTel.”
As well as recently taking a seat on the board of PanTel, Toros has also been appointed chairman of the management committee for the 2,530km JADI Link network, the product of a collaboration between Turk Telekom, the Saudi Telecom Company, the Jordan Telecom Group and Syrian Telecom. The fibre-optic network was launched on July 1 2010, and collects the international data infrastructures of the four countries on a single line, linking Jeddah, Amman, Damascus and Istanbul. The JADI Link will be available to the market by the end of 2010.
Toros is also keen to pursue similar opportunities where possible: “We want to make a similar operation with Russian or with Caspian operators. Of course, these are based on terrestrial connectivity, but we are also interested in submarine cables in the Mediterranean corridor, connecting Egypt, Lebanon and other countries around the Mediterranean.”
PanTel was the original name of Invitel International before its acquisition by Invitel Holdings; when Invitel International was required to change its name under the conditions of sale, its board decided to revert to its original name. Following the disposal of its international wholesale business, Invitel Holdings will focus on its domestic business in Hungary.