Slim-backed Telekom Austria and KPN form network pact

Reuters News
Posted: Aug 13, 2013 7:17 AM
Slim-backed Telekom Austria and KPN form network pact

VIENNA (Reuters) - Telekom Austria and Dutch group KPN, the European rivals in which Mexican tycoon Carlos Slim has invested, have joined forces to offer internet-based data services to wholesale and large business customers, they said on Tuesday.

The two companies are combining their infrastructure to create a "backbone" optic fiber network across 35 countries whereby Telekom Austria can use KPN's network for its customers in western Europe and KPN can use Telekom Austria's network in central and eastern Europe.

The announcement is the first evidence of the promised synergies to be had since Slim's America Movil Latin American telecoms company acquired large stakes in both European companies a year ago.

A Telekom Austria spokesman declined to estimate the size of the potential synergies.

The network's main exchange points will be in Frankfurt, London, Amsterdam and Paris, and will stretch to north America. It will use common marketing and sales efforts.

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Last week America Movil proposed a bid for the rest of KPN, sparking speculation he could eventually try to take over Telekom Austria as well.

In announcing results on Monday, Telekom Austria's management side-stepped questions as to whether Slim might make a takeover offer.

(Reporting by Michael Shields; Editing by Greg Mahlich)