change font size

print version

copyright

Other languages:

Mobile Phone War Hots Up in Kosovo

23 11 2006  Local rivals hope populist attacks on Norwegian company will sink its chances
 
By Besnike Salihu in Pristina (Balkan Insight, 23 Nov 06)

The contest to become the operator of Kosovo’s second mobile phone network, which opened on November 3 and closes on January 17, is already fierce, with local bidders targeting Norwegian giant Telenor in what many see as an unscrupulous PR campaign.

Brand names in international telecommunications have started negotiating with local partners, whose eyes are trained on the telecommunications companies that recently bought mobile phone operators in the region, such as T-Mobile in Macedonia, Vodaphone in Albania, Telenor in Serbia and possibly Deutsche Telecom.
 
The first tender for the second mobile company, launched in 2003, was cancelled amid accusations of irregularities in the tendering process and political pressure.
 
As a result, Kosovo still has only one legal mobile phone operator, Vala 900, part of the publicly owned Post Telecom of Kosovo, PTK.
 
But many users complain of poor service and high prices precisely because Vala 900 has no competition in a market of 2 million – half of whom use mobile phones.
 
As publicity campaigns take off with a view to discrediting various competitors in the field, Telenor, the Norwegian company, is suffering the most hard-hitting assaults.
 
The Oslo-based player is a big hitter, with shares in 13 mobile phone operators in Europe and Asia and a base of around 100 million users.
 
Nervous local rivals are floating numerous complaints at Telenor’s expense.
 
Most relate to Telenor’s acquisition in September of Mobi 063, a company previously owned by Mobtel of Serbia. The company was established on April 4, 2006, continuing its predecessor’s operations and holding on to its former assets in Serbia and Kosovo.
 
The Mobtel network was installed in Kosovo during the early 1990s and continued to operate even after the Serbian forces withdrew from the territory in1999.
 
Since then, the Kosovo authorities have seen Mobtel as an illegal operator, as it failed to pay any taxes or license fees to the local authorities.  
 
The issue was politicised and complicated by the fact that most of the Serbs living in Kosovo refuse to use Vala 900, preferring Mobi 063.
 
 “The status of operators from Serbia now operating in Kosovo is still not clear,” one local bidder, Akan Ismaili, of IPKO net, told a TV debate on November 17, adding that Kosovo’s government had yet to take a clear stand.
 
Ismaili said the failure of the authorities to collect any revenue from MOBI 063’s new owner, Telenor, meant that law-abiding operators were being effectively “discriminated against”.
 
Kai Rosenberg, vice-president of communications for the Oslo-based firm, denies that Telenor is obliged to pay taxes in Kosovo on behalf of Mobtel.
 
As part of the purchasing contract for Mobi 63, “the government of Serbia agreed to take responsibility for any claims and potential irregularities related to the business formerly conducted by Mobtel”, he told Balkan Insight.
 
Fatmir Gashi, head of Dukagjini/Mobikos, owned by Ekrem Lluka, another competitor for the second mobile operator, considers Telenor has no right to be in the race for much the same reasons as Ismaili.
 
“Those who illegally operate in Kosovo but have a network infrastructure distributed all around Kosovo have no right to compete for the bid,” he said.
 
Gashi said Telenor appears to enjoy an advantage in the bidding because it was able to use the infrastructure of the network that Mobi 063 had established around Kosovo.
 
In other words, it did not have to make any further investment on the scale that other bidders would have to make to spread the mobile network all over Kosovo.
 
But Rosenberg argues that the present infrastructure of Telenor in Kosovo doesn’t add up to much.
 
It comprises “a dozen rather old antennas” he said. “Most of the present telecommunications companies in Kosovo already have much more advanced networks that they use for their own commercial purposes,” he said. “Telenor really does not enjoy any advantage. If anything, the opposite is true.”
 
But the issue of Telenor’s bid remains highly charged. After years of armed conflict with Serbia over Kosovo’s independence, the overwhelmingly Albanian population does not relish a company linked in any way to Serbia taking control of such a crucial sector.
 
National security concerns have been raised as an argument against allowing any companies that operate out of Belgrade from managing a major Kosovo enterprise.
 
A source in the telecommunications industry said Telenor’s rivals were unlikely to let go of this emotive argument.
 
“The legal arguments against Telenor do not have much legal basis,” he said.
 
“But by linking Telenor to Serbia’s debts to Kosovo they have a populist argument that will win the PR battle for Telenor’s competitors.”
 
The same source noted that Telenor’s local critics, while savaging the company in public, are negotiating with it in private over possible joint bids.
 
Gashi admitted in the November 17 TV debate that Dukagjini had negotiated with Telenor, though he went on to say that they had “stopped these negotiations”.
 
Qemajl Ahmeti, Kosovo’s telecommunications minister, said the authorities were reluctant to get involved in the business of who should or should not take part in the race.  “Under international rules you cannot forbid anyone to compete,” he said.
 
Besnike Salihu is a Balkan Insight contributor. Balkan Insight is BIRN’s online publication.