German company to get telecom stakes

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By PAUL CARREL / Reuters

FRANKFURT - Deutsche Telekom AG said it would acquire stakes in a host of East European mobile phone operators with a $2 billion investment it hopes will cement its foothold in the region's fast-growing market.

One of the stakes it is going to acquire is a share in Russian Telecom Development Corp., an investment company holding stakes in a number of Russian mobile telecoms, including Moscow Cellular Co. and St. Petersburg's Delta Telecom.

Telekom also said it would buy U.S. MediaOne Group's 49 percent stake in Hungary's Westel 450 and Westel 900, which together control two-thirds of the country's telephone market.

It will also buy Media One's 22.5 percent stake in Polska Telefonia Cyfrowa (PTC), Poland's leading mobile phone operator, bringing its stake in PTC to 45 percent.

Deutsche Telekom's foray into Eastern Europe, following rival Mannesmann AG's acquisition on Thursday of UK mobile operator Orange, is a further evidence that the race for market share in the European market has reached a new level of intensity, analysts said.

"Eastern Europe is very underdeveloped on the communications side and this gives Deutsche Telekom easy penetration," said Jim McCafferty, analyst at SG Securities in London.