Falcon

MidEuropa acquired a stake in Falcon in November 2006 and purchased an additional stake in the Company in November 2008. Falcon is a holding Company that owned Ceske Radiokomunikace (CRa) as well as a stake in T-Mobile Czech Republic (TMCZ). The initial deal was secured through MidEuropa’s network and experience in the sector.

CRa, with a 97% market share, was in a unique position to play an instrumental role in the country’s transition from analogue to digital terrestrial broadcasting services, leveraging its infrastructure to offer ancillary telecom services to corporate customers. TMCZ was a leader in a smaller but growing market and MidEuropa was confident it could benefit from continued increases in penetration of mobile services, and boost its average revenue per user by migrating pre-paid customers to post-paid and expansion of data services.

CRa was sold in May 2010 when it owned one of the three digital multiplexes covering the largest area of the country, and operated three further multiplexes, having launched digital broadcasting in 2006. TMCZ was sold in February 2014. 

Partnership highlights:

• Significantly improved margins through migration from analogue to digital terrestrial TV and focus on cost control. EBITDA margin increased from 32% to 61%
• Enhanced barriers to entry and improved market position through investments in the digital TV broadcasting network, securing long term (10+ years) contracts with major content providers
• Disposed of non-core, low-margin and capex-intensive Retail Telecom Business to focus on core broadcasting business

Value creation:

• Operational Excellence
• Digitalisation