Vodafone and Wind Hellas aim to create a major rival to fixed-line telephony market leader OTE through the absorption of Forthnet and Cyta Hellas, which would start with a subscription base of 2 million clients as well as over 500,000 pay-TV subscribers.
Between them the two cell phone networks control 40 percent of Forthnet, and are seeking the acquisition of the remaining 60 percent of the company that has an extensive triple-play network including leading satellite TV platform Nova. Wind has also submitted an offer to the Cyprus Telecommunications Authority (Cyta) for the buyout of its subsidiary in Greece.
This would result in the further concentration of the sector, while the major players have stopped offering cash for acquisitions and instead are offering share swaps. Sources say that Wind has offered to buy Cyta’s Greek arm in such a manner. Cyta Hellas is deep in debt anyway, so any cash transaction would have to involve a very low sum. Although Wind is the sole bidder for Cyta, it is understood to be acting in cooperation with Vodafone.
Many observers expect a similar offer by Wind and Vodafone for the buyout of the remaining 60 percent of Forthnet. Last summer the two companies had made a cash offer ranging between 1.70 and 1.90 euros per share, pending the due diligence which has now been completed without Vodafone and Wind having submitting a binding offer.
OTE has frozen its pursuit of Nova due to the deterioration in the financial climate, but Wind and Vodafone will apparently persist in their efforts to obtain full control of Forthnet, even though the other shareholders will have to lower their expectations as the country has returned to economic instability.
If Wind and Vodafone do manage to create a major landline rival to OTE, it will be based on the activities of Hellas Online, controlled by Vodafone, and the former Tellas, which is now controlled by Wind Hellas. The subscription bases of Forthnet and Cyta Hellas will then bring the new landline network client figure to some 2 million.