Bulgarian tycoon buys Telekom Albania for €50 mln

Tirana Times
By Tirana Times January 16, 2019 13:36

Bulgarian tycoon buys Telekom Albania for €50 mln

Story Highlights

  • Greece-based OTE Group, where Germany's Deutsche Telekom holds a 45 percent stake, says it has agreed to sell its Albania operations for €50 million to Albania Telecom Invest AD, a joint venture led by Bulgarian businessman Spas Roussev, where Albanian-Bulgarian businessman Elvin Guri also has a minority stake

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TIRANA, Jan. 17 – Greek-German-owned Telekom Albania has been sold to a Bulgarian investor who controls Bulgaria’s largest telecoms operator, putting an end to months of negotiations over the sale of Albania’s second largest mobile operator.

Greece-based OTE Group, where Germany’s Deutsche Telekom holds a 45 percent stake, says it has agreed to sell its Albania operations for €50 million to Albania Telecom Invest AD, a joint venture led by Bulgarian businessman Spas Roussev, where Albanian-Bulgarian businessman Elvin Guri also has a minority stake.

Spas Roussev is the main shareholder in Bulgaria’s leading telecoms operator Vivacom, purchased in August 2016 from Russia’s VTB for €330 million.

The sale, subject to approval by competition and electronic communication watchdogs, also marks the first major Bulgarian investment in Albania, a country where the stock of Bulgarian investment is at a modest €24 million, and a small commercial bank is the major Bulgarian investment.

The sale of Telekom Albania comes after a hike in losses in 2017 and Albania’s mobile phone market having embarked on an ongoing downward trend since almost a decade, triggered by tougher competition and smartphone apps replacing traditional phone calls and text messages.

“The sale of Telekom Albania concludes the successful investment in Albania for OTE Group. It is a strategic decision in the context of OTE Group’s redefined priorities and growth plans in order to create value for all shareholders and support sustainable development,” OTE’s chairman Michael Tsamaz said as quoted in a statement.

Former AMC Albania was initially launched as a state-run operator in late 1995 as the country’s first mobile operator before it was acquired in 2000 by Greece’s OTE Group and rebranded Telekom Albania in mid-2015.

Telekom Albania is currently the second largest mobile operator in the country with a 36 percent market share, but posted significant losses in 2017 along with leading mobile operator Vodafone Albania as the mobile phone market suffered a double-digit decline in revenue, in an ongoing downward trend since almost a decade, triggered by tougher competition and smartphone apps replacing traditional phone calls and text messages, according to the electronic communications watchdog.

 

Telekom Serbia failed negotiations

The sale to Bulgarian investors comes after failed negotiations with Telekom Serbia as a non-preferable option in a strategic sector such as telecommunications where some experts had voiced concern the country’s national security could be put at risk by non-EU and non-NATO service providers

In a tender held last September, Telekom Serbia, where the Serbian government holds a majority stake, was reported to have submitted the highest bid of around €61 million.

Unnamed Albanian government sources had warned the involvement of Telekom Serbia in the Albanian mobile telephony market could spark reactions that would have a negative impact even for the company itself due to concerns over national security in a sensitive sector such as telecommunications and amid fears of the public not welcoming the operator’s arrival over non-positive feelings and perceptions related to tense historical political relations between the two countries.

“The Albanian government’s stance is quite simple and clear, Serbian businesses are welcome in the Republic of Albania, but in this strategic sector, it is not our preference,” said Prime Minister Edi Rama.

 

Shrinking market

The number of active mobile phone subscribers suffered a sharp double-digit drop during the first three quarters of 2018, registering the first such slump since mobile services were launched in the country in the early 2000s.

A quarterly report by Albania’s electronic communications watchdog, AKEP, shows the number of active mobile phone subscribers, defined as those who made or received at least one call or text message in the last three months, fell to 2.85 million in Sept. 2018, down by a quarter compared to the third quarter of 2017 when Albania had 3.85 million active subscribers.

The decline by around a million comes at a time when the smallest and sole Albanian-owned operator ceased its operations at the end of 2017. The slump also comes amid higher use of smartphone apps replacing traditional phone calls and text messages, making holding two mobile numbers unnecessary and too costly for subscribers at a time when mobile fees have slightly increased following a sharp decline in mobile operators’ income.

An annual report by the country’s electronic communications authority, AKEP, shows the country’s four mobile operators saw their revenue drop by an annual 12 percent to 29.7 billion lek (€236 mln) in 2017, the lowest level since 2003 when only two mobile operators were offering their services in Albania.

Albania’s electronic communications watchdog has recently voiced concern that the downward trend in income generated by mobile and other electronic communications operators in Albania will negatively affect the level of investment and the quality of service in the country.

Back at the end of 2017, Plus Communication, the sole Albanian-owned operator, ceased its operations after selling its shares to rivals Telekom Albania and Vodafone Albania, reducing the market to three operators, including Turkish-owned Albtelecom.

 

Tirana Times
By Tirana Times January 16, 2019 13:36