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Press Release
Vienna – November 7, 2017

Like Coffee with a Sachertorte.
Drei and Tele2 are the perfect match.

  • With Tele2 on board Drei will offer fixed-line and IT services and thus becomes Austria’s biggest alternative telecommunications provider.
  • Acquisition leads to more competition and new offers.
  • Main Goal: Revenue growth to more than 1 billion euros and market-leadership in new business customers.

Hutchison Drei Austria, a subsidiary of CK Hutchison Holdings Limited, has completed its takeover of 100% of Tele2 Telecommunication GmbH. With this acquisition, Drei emerges as Austria’s largest alternative telecommunications provider. In the future, Drei will offer fixed- line and IT-solutions next to mobile communication, Internet and TV. The company will dramatically increase its market share in business customer as every fourth company and every third large-scale enterprise will become a 3customer. In the future Drei wants to be the first choice for Austrian companies interested in new contracts.

Nothing will change for existing Tele2 customers as Drei will continue using Tele2’s successful business model and focusing on services with the existing regional Tele2 teams on board in order to ensure continuity in customer support.

Drei CEO Jan Trionow said, “Tele2’s employees are the most important factor for a successful takeover. We are very happy to welcome Tele2’s top team and its customers at Drei. The closing of our transaction is good news for both companies’ customers, employees and Austria’s infrastructure. With this acquisition, Drei and Tele2 have merged into an alternative telecommunications full-service provider. With the successful integration of Tele2, we will prove once again that one and one can make three.”

New GSMA-study: Drei/Orange Takeover increased 4G coverage by up to 30%.
According to a new GSMA study, the takeover of Orange by Drei about 5 years ago has benefitted Austria’s mobile communications significantly. The acquisition has not only led to a 20% to 30% bigger 4G coverage, but also increased the internet transmission rate by at least 7 mbit/s for customers of both companies. Consequently, Austria’s infrastructure competition has intensified. According to a recently published long-term evaluation study by GSMA, Austria’s 4G networks are nowadays better and faster than most of other countries.

Jan Trionow said, “With the Tele2 takeover, we want to stimulate Austria’s price- and offer-based competition in the landline segment. Austria’s Competition Authority, which approved the acquisition by mid-October also concluded that the merger could have a positive effect for the competition as more bundle offers will emerge (mobile/ fixed-line and broadband).”

Trionow added, “The takeover’s main goal is revenue growth. With Tele2 on board we will increase our revenue to more than EUR 1 billion and want to become market leader with new business customers. What unite Tele2 and Drei are our flexibility, price-service ratio and our close customer-proximity. All of these make us an attractive alternative to the ex-monopolist.”

Almost Head to head with mobile residential customers: Drei is an increasing pressure for market leader.
According to current market research, Drei is already putting the market leader in key areas such as “mobile residential customer” and “fixed-line large-scale enterprise” under significant pressure. Tele2 is also dominating a third of the market.

Having 32.3% market share in mobile communication residential customers with active sim-cards, Drei is almost head to head with the market leader’s 35.7%. In the overall mobile market, Drei currently has a market share of 28%. With Tele2, Drei is also moving the fixed-line and business customer area closer to the number 1 position.

While Drei has had success within the small and medium enterprise area with its diverse portfolio, Tele2 has focused on large-scale enterprises with individual communication solutions. Tele2 has counted leading Austrian companies, authorities and public service enterprises amongst its clientele. Together, Tele2 and Drei are increasing their market share in fixed-line voice business to about 24%.

Tele2 Integration in Q2 of 2018.
In the upcoming months, Tele2 will continue as a Hutchison Drei Austria GmbH subsidiary. The legal aspects of the company merger with the operative Hutchison Drei Austria, and the rebranding will take place in Q2 of 2018.

After the consolidation, Drei will plan to roll out new offers of complete telecommunication and IT, as well as innovative bundle for its residential customers. Furthermore, the combination of mobile and fixed-line shall lead to an even faster and stabler internet for customers. First joint products shall also be launched in Q2 of 2018.

Trionow said, “Tele2 is the perfect match for Drei – like a cup of coffee with a Sachertorte. In the future, we will be able to offer from our own resources what was only achievable with the help of partners in the past. This will provide new opportunities especially in growth areas like smart home, IoT and M2M solutions.”

Tele2 generates direct contribution to the success of Drei.
Drei wants to proceed carefully with the organisational merger over the course of 2 years. Together with Tele2, Drei has about 1,500 employees and about 4 million mobile phones, landline and Internet connections (revenue generating units).

Within the first 6 months of 2017, Tele2 has increased its revenue by 1% to 59 million euros, its EBITDA by 18% to 11 million euros and more than doubled its EBIT to 6 million euros. As a consequence, Tele2 will be contributing positively to Drei’s EBITDA.

About Drei
Hutchison Drei Austria GmbH is a 100% subsidiary of CK Hutchison Holdings Limited (Hong Kong) and part of the 3Group Europe. In the first six months of 2017 Drei achieved a total revenue of 386 million euros with about 3.7 million customers. Since its launch in 2003, the company has been a pioneer for simple solutions for digital life, which includes fast mobile broadband internet for households, 3MobileTV and movie and music services for smartphones. Drei is the mobile provider with the biggest network of branded stores in Austria. Next to an encompassing customer service for private and business customers, Drei provides Austria with the most dense and powerful 4G network with a 98% coverage in population. Drei has repeatedly been declared the overall winner of the leading network test performed by Connect, an independent specialised magazine. Drei was also the winner in Austria’s top customer services ranking, taking home the title “Service-Champion”(8/2016). In the business rate test of the Austrian Society of Consumer Studies, Drei was made the overall winner (ÖGVS 2/2017). On Oct 31, 2017 Hutchison Drei Austria finalised the acquisition of Tele2 Austria.

Drei Contact:
Tom Tesch
Hutchison Drei Austria GmbH
Tel.: +43 (0) 50 660 33700