Honda website
Honda website

NOVEMBER 21, 2001

Changes ahead for A1

THE A1 mobile telephone company, which has played a major role in the funding of the A1 Ring (formerly known as the Osterreichring), may be making some changes in policy if the company falls victim to a takeover. The company is doing well at a time when many of Europe's telecom companies are struggling but it is a small player in the international scene and so likely to be gobbled up.

Telecom Italia, which controls about a third of the shares is rumored to be selling off its involved in the company because it had heavy debts incurred in the bidding for mobile phone licences and this stake plus the Austrian government's holding of 47.8% are expected to be sold together. There are suggestions that the firm might be snapped up by a corporate raider such as Kohlberg Kravis Roberts which would then fund the purchase by selling off the various parts of the business.

The prize division is Mobilkom, the company's wireless service, which uses the A1 brand. Sales this year are up about 15%. There is already a cost-cutting program going on but a new owner may have different views about the sponsorship of a Formula 1 race. This is not necessarily a problem as before the A1 money came along to fund the track back in the mid 1990s, there was talk of F1 boss Bernie Ecclestone buying the track.

However with such big pressure at the moment for new races outside Europe, Austria is considered by most people in the F1 circus as being a weak link and one of the most likely races to be dropped.