Telekom Romania

The Telephone Palace (Palatul Telefoanelor) on Victory Avenue

In 1930, Societatea Anonimă Română de Telefoane (SART, "Romanian Telephone Company, Ltd.") was founded, more than 90% of its value being a foreign investment from ITT.

During this period (1930–1933), SART commissioned Palatul Telefoanelor (The Telephone Palace), a historic building in Bucharest. Although the building has suffered from several earthquakes and a bombardment, it is still standing, and has recently undergone a process of reconstruction and reconsolidation.

In 1949, SART was nationalised and turned into a division of the Ministry of Posts and Telecommunications. The slow pace of technological development that ensued was in accordance with a more general trend in the country during the Communist period, which lasted until 1989.

In December 1989, ROM-POST-TELECOM was created as a post and telecommunications operator, independent of the Ministry. The company adopted the name of Romtelecom after a reorganization in July 1991, when the state-owned company was also given the monopoly for basic telecommunications services.

In 1997, a 35% of the company's shares were sold to the Greek telecommunications company OTE. A corruption case arose around details of this privatisation, but eventually no measures were taken.

OTE has since acquired an additional 18% of the shares and has thus become the majority shareholder of the company.

The company launched on the Romanian mobile telephony market in 1998 as Cosmorom. In the first years, the company failed to gain market share. Having less around 1% market share and financial losses, there were talks about the selling of the company, but the decision was delayed several times due to disagreement between OTE, the majority owner of Romtelecom and the Romanian Government.[1] In January 2004, Romtelecom decided to sell a majority stake in the company. Two of the purchase offers received were from Mobikom (now A1 Telekom Austria) and Deutsche Telekom's Matev from Hungary.[2]

In July 2005, OTE's mobile division Cosmote decided to buy 70% of shares in Cosmorom from Romtelecom, and on 6 December 2005, it was rebranded as Cosmote România (known locally as simply Cosmote).[3] By the end of 2005, Cosmote had approximately 50,000 subscribers, while Orange and Vodafone each had 6 million subscribers. On 2 March 2006, the company started a strong sales campaign on the prepaid market, which led to sharp subscriber rise to 1.23 million subscribers by the end of the year, and finally reaching a peak of 6.92 million subscribers by 2009.

On 30 June 2009, Cosmote acquired Zapp Mobile, a CDMA mobile operator with 374,000 subscribers, which also had a 3G license.[4] Following Zapp acquisition, Cosmote launched its 3G service.

On 12 September 2014, Romtelecom and Cosmote România unified its mobile and fixed services under the Deutsche Telekom branding and changed their respective legal names to Telekom Romania Communications S.A. and Telekom Romania Mobile Communications S.A. respectively.[5]

In exercising its shareholder rights, the Ministry of Communications and Information Society (MCIS) reached a preliminary agreement in August 2020 with French telecommunications company Orange S.A. regarding the possible sale of Telekom Romania's fixed operations, whereby the Romanian government will own a 20% stake in the new entity.[6] Following this preliminary agreement, on 9 November 2020, Orange reached an agreement with OTE to purchase its 54.01% shareholding in Telekom Romania Communications S.A., thus acquiring Telekom Romania's fixed operations.[7] Telekom Romania's mobile operations will continue to be held by Deutsche Telekom by virtue of OTE's majority shareholding in Telekom Romania Mobile Communications S.A.

In order to complete the transaction, the parties will need to first seek regulatory approval, including from the EU and Romanian competition authorities and the Supreme Council of National Defence. The president of the Romanian Competition Council has already expressed concern about Telekom Romania's sale and the smaller number of competitors consequently on the market, raising the possibility that the sale might face significant regulatory hurdles to overcome.[8]