Telekom Austria and Dutch group KPN have been reported to have joined forces in order to offer internet-based data services to wholesale and large business customers. The group is the European rival in which Mexican tycoon Carlos Slim has invested.

The two companies will now be able to combine their infrastructure to create a backbone optic fiber network across 35 countries. It will enable Telekom Austria to use KPN's network for its customers in Western Europe. On the other hand, KPN can use Telekom Austria's network in central and eastern Europe.

The announcement was made on Tuesday, which is the first evidence of the promised synergies ever since Slim's America Movil Latin America telecoms company purchased major stakes in both European companies a year ago.

A Telekom Austria spokesman refused to reveal the estimated size of potential synergies. Main exchange points of the network will be in Frankfurt, London, Amsterdam and Paris. It will further stretch to North America. Common marketing and sales efforts will be used by it.

Telekom Austria has a plan to save at least 100 million Euros in costs this year. However, it said that spending on acquiring and retaining customers went up to 83 million Euros in the first half of the year. The cost was 42 million a year earlier.