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London (pte019/10.03.2005/12:00) - British mobile phone giant Vodafone http://www.vodafone.co.uk has announced that it is in talks to buy the Canadian Telesystem International Wireless' (TIW) operations in the Czech Republic and Romania in a deal worth around 3.5 billion dollars. The mobile phone provider is also considering a bid for Telsim Mobile Telecommunication Services, a Turkish mobile phone service provider that is set to be auctioned by the Turkish government, according to insiders. As the Wall Street Journal (WSJ) http://www.wsj.com reports, expansion into developing markets could help Vodafone compensate for slowing growth in its core markets in Western Europe and Japan. According to Arun Sarin, the company's chief executive, Vodafone would be interested in increasing its stakes in service providers in Poland and South Africa.
Vodafone already has a 20 per cent stake in TIW's largest Romanian operation, Mobilfon, which had 4.9 million customers at the end of 2004. TIW's Czech business, Oskar, is ranked third in that market, with 1.8 million customers at the end of 2004. While, in the Czech Republic, more than 90 per cent of the population has mobile phones, only 47 per cent of the Romanian population has mobile phones, meaning an enormous potential to expand. According to the WSJ, Vodafone has largely missed out on the recent mobile phone boom in the developing world, which has been driven by sharp falls in the cost of handsets and wireless infrastructure. The company' assets in the developing world amount to several operations in Africa and Eastern Europe and a 3 per cent stake in China Mobil, China's largest mobile phone service provider.
Vodafone may also get a chance to increase its 20 per cent stake in the Polish service provider Polkomtel this year. Some other shareholders have said they would like to sell their stakes, but Vodafone may face competition from TDC of Denmark, which also has a 20 per cent stake in the company. In South Africa, Vodafone hasn't yet been able to persuade Telkom SA, which owns 50 per cent of mobile phone service provider Vodacom, which Vodafone has a 35 per cent stake in.
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