Fitch: Tellas soon likely to be part of WIND telecom

Following the recent total acquisition of alternative telecoms operator Tellas by Egyptian magnate Naguib Sawiris, Fitch Ratings said in a report yesterday that it considers it likely that Tellas will at some point become part of the WIND Hellas group, majority-owned by Sawiris’s Weather Investments SpA. In Fitch’s view, a combination of, or cooperation between, WIND Hellas’s mobile operations and Tellas’s fixed-line operations may be positive in terms of a defensive strategy but there is limited evidence to support a significant increase in subscribers as a result of cross-selling opportunities between a mobile subscriber base and a fixed-line business. Nevertheless, Greek broadband penetration is still low by Western European standards so there is opportunity for alternative providers, and the experience of WIND Hellas’s Italian sister company Wind Telecomunicazioni may prove useful in developing dual-play business further. In general, however, Fitch would expect a fixed-line business to contribute lower margins than a mobile business, and a combination would therefore be margin-dilutive.