PRAGUE - Vodafone of Britain is to pay 4.4 billion dollars to buy Czech mobile phone operator Oskar Mobil and Romanian Mobifon from Canadian Telesystem International Wireless (TIW), Vodafone and TIW said on Tuesday.
Vodafone will pay about 3.5 billion dollars (2.6 billion euros) in cash and will also assume about 950 million dollars of net debt.
Analysts said that that the entrance of Vodafone, which has more than 150 million customers worldwide, would shake up the Czech market.
TIW said that the sales concerned its holdings of 79.0 percent of MobiFon SA and 100 percent of Oskar Mobil.
MobiFon, which launched commercial operations in 1997, is the market leader in Romania with a 48 percent market share and 4.91 million subscribers and Vodafone already has a 20-percent stake in the company.
Oskar, which launched in March 2000, is the youngest Czech carrier with a 17-percent market share and 1.83 million customers.
Vodafone announced the purchase in a statement to the London Stock Exchange and its chief executive Arun Sarin said: "I am delighted that MobiFon and Oskar, both fast growing mobile operators, will become part of Vodafone, where they will benefit fully from the global services and scale benefits that our group can deliver,"
The deal would further Vodafone`s ambitions in Europe, he added.
"These acquisitions will create value for our shareholders and will be good for our customers. They are also consistent with our stated strategy of increasing investment in Central and Eastern Europe."
Reports of the talks with Vodafone, the world`s leading mobile company, first emerged on Wednesday.
Vodafone spokesman Ben Padovan told AFP: "These two companies would be in line with our focus on central and eastern Europe as a driver of our future growth."
Telecommunications analyst Tomas Gatek told AFP: "Oskar is an attractive, well-performing company and has the highest number of post-paid customers. It makes sense for Vodafone to want to buy it."
MobiFon has 4.9 million customers in Romania, or 48 percent market share, while Oskar has 1.8 million customers, equivalent to 17 percent market share, in the Czech Republic.
Oskar Mobil, formerly known as Cesky Mobil, said the number of its customers rose by 18.4 percent in 2004. Its revenues rose by almost 24 percent year on year to 13.4 billion koruna.
Oskar is the smallest of the Czech Republic`s three mobile operators.
Vodafone was reportedly interested in teaming up with a fixed-line operator to take part in the Cesky Telecom privatisation so that it could spin off mobile arm Eurotel. But it ultimately did not take part in the tender.
"Vodafone would be a strong global player in the market and that could well bring more competition and a reduction in prices," said Gatek.
"With Vodafone and the likely sale of Cesky Telecom, including Eurotel, to France Telecom or Swisscom we would see all three mobile operators backed by giants. That would mean much stronger competition and a more aggressive fight for market share," analyst Jan Prochazka told AFP.
Analysts say Oskar could gain most from the introduction of mobile number portability, whereby customers can keep their phone numbers when they change operator, in the Czech Republic early in 2006.
"This is particularly important for small and medium-sized businesses who don`t want to risk losing customers by changing their numbers," Gatek told AFP.

03/15/2005 14:46 GMT