Bulgarian telecom Spectrum Net will acquire local peer Orbitel in a deal worth five million euro, the two companies said in a joint statement on November 17 2009. The deal is subject to approval by Bulgaria's competition regulator.

The two telecoms, both set up in 1997 to challenge former fixed-line state monopoly Bulgarian Telecommunications Company, now called Vivacom, will merge operations and expect to report 20 million euro in revenue and a gross profit of five million euro in 2010.

"The deal with Orbitel met our strategic need for expansion in the right moment to grow and benefit from the natural synergy between the two companies," Spectrum Net chief executive Theodor Zahov said in the statement.

"The acquisition represents our ambition to consolidate the alternative telco business in Bulgaria and to stand as the largest alternative operator on the local market."

Vivacom remains the dominant fixed-line services provider in Bulgaria.

Magyar Telekom, owned by Deutsche Telekom, said that it has brought Orbitel to international standards in operation and profitability during three years of ownership, but will take a hit on the sale, having bought Orbitel for eight million euro. Deutsche Telekom indirectly controls Bulgaria's second-largest mobile operator Globul, part of Cosmote, the mobile unit of Greek Telecoms group OTE, in which Deutsche Telekom owns 25 per cent.

Magyar Telekom will be paid 3.5 million euro when the deal is closed, which the two companies expect to be by end-March 2010. The rest of the acquisition price would be paid in installments.

Orbitel holds nationwide licenses for voice and data transmission, offering telephony, broadband internet and virtual private network services. Its portfolio also includes website hosting, domain reservation, business e-mail accounts and technical consultancy.

Spectrum Net provides integrated data, voice and virtual services to corporate customers, venturing into the home users segment in 2008.