Macedonia - side-effects of a merger

Cosmofon Macedonia set to close, paper says

According to a report in the Greek newspaper Ta Nea, Cosmote’s Macedonian mobile unit Cosmofon will close down as a result of Deutsche Telekom (DT’s) acquisition of a 25% stake in Greek national fixed line operator and parent of Cosmote, Hellenic Telecommunications Organisation (OTE). The paper says that after careful consideration of the contract signed by DT and the government of Greece on a strategic partnership, Athens has accepted the terms and conditions under which it would stop operating mobile services in Macedonia and will no longer use its licence for offering cellular services in Montenegro. OTE has apparently taken the decision to avoid the creation of a monopoly situation in Macedonia where DT already owns Makedonski Telekom and T-Mobile Macedonia. The new German owner is keen to continue with the T-Mobile brand in the country and shutting down Cosmofon will avoid harming its long term interests, the paper said.

Ta Nea claims that Cosmofon’s head office in Skopje was ‘reserved in its statements’ on the developments yesterday, saying only that the deal brokered by the Greeks and the Germans had not yet been ratified, and they would continue as normal for the time being. Industry watchers also point out that any decision to close down the successful cellco, which generates turnover of tens of millions of euros per annum, would not make economic sense, and that selling the venture to another company would be a more logical thing to do. Earlier this month, Cosmofon was reportedly preparing to lay off between 40 and 50 people as part of wider preparations for the sale or restructuring of the business pending the completion of DT’s acquisition of OTE of Greece. Reports in the Dnevnik newspaper said the firm had not confirmed the job losses, but rumours emerged that the redundancies would be announced in the next few weeks.