Romanian telecom group Digi Communications said on May 27 it has reached an agreement to take indirect majority control of local mobile operator Telekom Romania Mobile.

Telekom Romania Mobile is the last remaining asset of the Greek group Hellenic Telecommunications Organization (OTE) that took over the country’s incumbent telecom group Romtelecom in a process initiated back in 1998.

Under the new agreement announced by Digi, West Network Invest, an investment vehicle majority-owned by Digi Romania (DIGI’s national branch) and minority-owned by Clever Media group (owned by local businessman Adrian Tomsa), will take over a 99.99% stake in Telekom Romania Mobile Communications (Telekom Romania Mobile) from OTE.

According to the agreement between the shareholders of West Network Invest, in the event the transaction is completed, Telekom Romania Mobile will remain in the market as an independent telecommunications operator (nothing is specified about the brand, though).

The deal is a second version of the preliminary agreement announced last November by OTE.

On November 21, OTE announced in a note to investors that it was in talks to sell the mobile operator to Quantum Projects Group – a vehicle owned by Romanian businessman Adrian Tomsa, who under the final agreement announced by Digi on May 27 is only a minority partner of Digi in the takeover vehicle.

The parties signed a memorandum of understanding to facilitate the process and submitted it for approval to the competent Romanian authorities, Digi Communications announced.

The head of the national competition body Consiliul Concurentei Bogdan Chiritoiu commented on the deal on May 27, as reported by HotNews. 

“Competition-wise, it’s more complicated because Digi is a large player in the market,” Chiritoiu said.

Previously, on November 23, Tomsa expressed "confidence" that he would obtain the necessary approvals from the National Security Council (CSAT) and from the competition body for the transaction. 

"We trust that the institutions of the Romanian state will favourably analyse this transaction as soon as possible, as all the necessary documents have already been submitted in this regard,” he said at that time.

It is not clear whether this was an obstacle, or the obstacle was of a financial nature – or maybe the partnership with Digi was a better option negotiated by Tomsa meanwhile.

Tomsa pledged to transform Telekom Romania Mobile into “a local, dynamic, safe operator, dedicated to all domestic residential customers”.  The new agreement does not invalidate such plans.

Telekom Romania Mobile reported €261mn in revenues and €16mn net losses, in 2023.

The company, which now has 3.66mn active SIMs out of which 1.93mn are post-paid subscribers, has reported net losses in nine of the past ten years. In total, there are nearly 24mn active SIMs, out of which two-thirds are for post-paid services.

On November 6, 2020, OTE agreed to sell its 54% stake in the fixed network company Telekom Romania Communications to Orange Romania for €295mn (the Romanian state owns the remaining 46%). In order for the transaction to be approved by the authorities, OTE committed to buy the remaining 30% of shares in Telekom Romania Mobile. The transaction was completed in July 2021.