FROM THE ECONOMIST INTELLIGENCE UNIT
Incumbent fixed-line operator Cesky Telecom and its mobile unit, Eurotel, have merged to form one company, which has been renamed Telefonica O2 CR (BEE Mar 6th 2006). The merger took effect on July 1st, although the company has indicated that it will continue to use the brand names Cesky Telecom and Eurotel during a transition period.
The company's main shareholder, Telefonica (Spain) purchased a 51% stake in Cesky Telecom from the state last year for Kc82.6bn ($3.7bn) and paid out an additional Kc26.9bn to minority shareholders to raise its stake in the company to 69.4% (BEE Sep 26th 2005).
Telefonica earlier announced that it expects the merger to bring in additional revenue of around €300m ($382m) from a combination of increased revenue streams and cost savings. The company has indicated that it plans to offer new packages to consumers combining fixed-line and mobile services.
Telefonica is the fifth-largest telecoms company in the world based on market capitalisation, which stood at $80.6bn at the end of the third quarter of 2005. For fiscal year 2005 the company reported a record profit of nearly €4.5bn ($5.7bn), up by 40% on 2004.
