Republic of Macedonia

one.Vip

Vip operatorIn a mobile market characterised by intense competition, one.Vip (formerly: "Vip operator") in the Republic of Macedonia maintained its focus on the growth of premium segments in the year under review. The acquisition of blizoo Macedonia, which closed on 30 July 2014, represents a significant step in the execution of the Telekom Austria Group's convergence strategy and means that Telekom Austria Group can now also offer bundled fixed-line and mobile services in the Macedonian market.

Furthermore, the Telekom Austria Group and the Telekom Slovenije Group agreed the merger of their subsidiaries Vip operator and the third-largest mobile operator One in October 2014 (now "one.Vip"). Telekom Austria Group will have a 55% equity interest in and thus sole control over the newly created joint company; Telekom Slovenije Group will have an equity interest of 45%. The agreement includes options for the exit of the Telekom Slovenije Group within three years of the transaction closing date. The transaction requires approval by the Macedonian anti-trust authorities, which is expected for the first quarter of 2015.

The significant growth in the number of contract customers was not quite sufficient to mitigate the fall in prepaid customers resulting from the migration to bundled products in the year under review. Accordingly, the total number of mobile communications customers fell by 1.2% year-on-year to 622,000. The share of contract customers thus increased from 47.5% in 2013 to 52.4% in the year under review. Vip operator's mobile market share also increase to 28.2% (2013: 28.0%). Following the acquisition of blizoo Macedonia, the Telekom Austria Group also reported 62,600 fixed access lines in the Republic of Macedonia at year-end 2014.