Orange and Deutsche Telekom discuss combining networks

Telecom giants Deutsche Telekom (Germany) and France Telecom (France), which hold the two biggest communications groups in Romania, with over 2.2 billion euros in cumulated turnover per year, are considering developing Romanian communications networks jointly, in view of cutting costs by a few tens of millions of euros. The talks also target markets such as Slovakia and Austria, and started in February.

Orange, Cosmote and Romtelecom, the companies controlled by the two telecom giants, together invest around 200 million euros per year in Romania, with a large share of the sum, around 50% of the total, being directed towards the networks. It is hard to say exactly how much the operators could save if you do not know exactly how big the coverage of the network is, the type of equipment involved and what shape it is in, but it is quite clear that the cost cuts would be substantial, says Michelle Gressani, CEO of the local subsidiary of telecom equipment manufacturer Ericsson.

“The joint use of the network enables operators to substantially cut CAPEX and OPEX expenditures. The joint use of the network by the two operators also translates as sharing the risks entailed by the implementation and the maintenance of networks, thus leading to reducing general risks,” Gressani said. Ericsson, the world’s biggest equipment manufacturer, works both with Orange, and with Cosmote and Romtelecom. Initial reactions from Deutsche Telekom and France Telecom show that both parties are tempted to take such a step on a difficult market such as Romania – with low fees and high investment needs, but talks are delicate and still exploratory.