RCS&RDS resumes negotiations for UPC Romania takeover

Newsroom 13/10/2011 | 14:18

Telecom company RCS&RDS has resumed the negotiations for the takeover of rival UPC Romania and chances to strike the deal are ‘extremely high’, says HotNews, quoting sources on the market.

This is not the first time there are negotiations between the two companies (UPC denied the media allegations, however). Negotiations restarted after RCS&RDS allegedly withdrew in September.

 “From my point of view, if UPC does not have a strategy to re-launch on the market and diversify their portfolio of services, maybe it would be a good idea to sell,” said Adrian Ciobanu, CEO Reimens, for BR.

 UPC is one of RCS&RDS’ main rivals, having posted last year a turnover of EUR 112 million. By taking over its rival, RCS&RDS would stand to gain more than 1 million clients with just one move.

 According to the financial results announced by the company today, the number of clients of UPC Romania decreased last year with 7.4 percent to 1.15 million.

 Market prospects

 If the two companies strike the deal and if the transaction is approved by the Competition Council, the new organization would be a giant that would only be opposed by Romtelecom as a matching competitor on the television, internet and telephony market. On the internet and telephony segments, it would also compete on an equal footing with telecom players such as Orange, Vodafone and Cosmote.

 On the other hand, Romtelecom will also possibly merge with telecom operator Cosmote, since both companies are part of the Greek Group OTE.

 Romtelecom is a very serious competitor since “they have the best infrastructure in the country and can offer services everywhere,” says Ciobanu for BR.

 On the other hand, “Romtelecom is an elephant that is moving very slowly and is bound by some chains linked to its feet and sometimes it falls on its nose. There are internal procedures that alter its efficiency. Technically, they are very well positioned because their infrastructure is very good but they should also exploit it because at the moment they are losing money. They are under attack from various parts: they have very high competition, they have very high costs and targets that need to be fulfilled, not to mention the crisis,” says Ciobanu.

In picture: Alexandru Oprea, president of RCS&RDS

Otilia Haraga

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