OAO Comstar United Telesystems, a Russian telecommunications company that raised more than $1 billion in a share sale this year, agreed to buy 51 percent of Hellas On Line SA for 47.9 million euros ($63.8 million).
Comstar UTS reached an agreement about the transaction with Greece's Intracom Holdings SA (INTRK), which owns Hellas On Line, the Moscow-based company said today in an e-mailed statement. The transaction is subject to approval from the Greek regulatory authorities, which is expected in the first quarter of 2007.
Comstar UTS has more than 3.6 million fixed-line subscribers in Moscow. Comstar UTS Chief Executive Officer Eric Franke said Nov. 1 the company will spend $150 million this year and the same amount next year for acquisitions as the company wants to expand and tap growth markets.
``The acquisition of Hellas on Line will allow us to create a basis for the development of broadband services in the market, which is characterized by the lowest penetration in Europe,'' Franke said in the statement today.
Broadband penetration in Greece is less than 6 percent of households, while the average penetration level for Western Europe is approximately 36 percent, Comstar UTS said.
Hellas On Line, Greece's first Internet service provider, is also one of the largest fixed-line operators in the country and the third-largest broadband provider with approximately 12 percent market share, the company said. Its residential client base includes about 35,000 broadband and 70,000 dial-up subscribers. The company's revenue in 2005 was 25.6 million euros, of which 40 percent was derived from residential clients.
Comstar UTS parent company AFK Sistema in June acquired a 51 percent stake of the telecommunications equipment unit of Intracom for 120 million euros ($159.7 million) to expand in the country.
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