Telekom Austria Group has decided to merge its landline and mobile divisions in Austria - mobilkom austria and Telekom Austria. The Group said that the main objective of the merger will be to meet increasing customer demand for integrated telecommunications solutions and convergent products in Austria. Moreover, the joint management of marketing, sales and customer service activities will generate additional cross- and upselling opportunities.
"With the merger of the fixed and mobile operations we are creating considerable advantages for our customers, who in the future will be offered all communications services from one source. This step also reflects the evolution of the Austrian market, where customers increasingly demand convergent products. At the same time this enables us to combine the innovative strengths of these two business operations," said Hannes Ametsreiter, CEO of Telekom Austria Group.
After the legal merger, the new company will be named A1 Telekom Austria.
"Based on preliminary forecasts, the Telekom Austria Group expects this merger to generate a positive contribution to earnings by 2012 and subsequently an annual increase in cash flow of approximately EUR 100 million p.a. in the mid-term after two to three years", said Hans Tschuden, CFO of the Telekom Austria Group
This growth will result from additional revenues and lower expenses. In addition, cash flow will also benefit from lower capital expenditures. Initial costs will impact results over the next few years and a negative cash flow effect of approximately EUR 80 million is expected for the 2010 financial year.
The move does not affect any of the Groups operations outside Austria.
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