TIRANA, Nov. 20 – Seven years after launching its operations as the country’s fourth mobile operator, Albanian-owned Plus Communication is about to exit the market following a preliminary deal with the country’s two largest operators to sell its frequency band, the Competition Authority has announced.
Albanian-owned Plus, the smallest and sole Albanian-owned mobile operator, has preliminarily agreed to sell half of its frequency spectrum to Vodafone Albania and the remaining half to Telekom Albania for an undisclosed amount, in a move which makes the country’s mobile telephony market fully foreign-owned and reduces market competition.
In a statement on the upcoming acquisition, the Competition Authority says Plus Communication has signed an October 17 deal with leading Vodafone Albania operator, part of UK-based giant Vodafone Group and second largest Telekom Albania (former AMC) operator, part of German Deutsche Telekom, to transfer each of them an equal 50 percent share of its 900 MHz, 1800 MHz and 2100 MHz frequency bands.
The watchdog says the move is an “integral and inseparable part of a broader package of negotiations and mutual agreement Plus Communication is holding with Vodafone Albania and Telekom Albania.”
The sale operation comes amid a sharp decline in income Plus registered in 2016 and failure to increase its 5 percent market share despite obtaining its long-awaited 3G licence last year at a time when its three competitors were already offering 4G services.
Plus Communication, owned by some of the country’s richest businessmen, saw its annual income drop by 30 percent to about €16 million in 2016 and net profit drop by ten times to a mere 87.7 million lek (€ 644,000), according to annual reports filed with the country’s National Business Center.
The company’s difficult financial continued this year with the closure of several shops in Tirana in the past few months.
Plus Communication launched operations in late 2010 after it was awarded the fourth GSM licence in an international tender for €7.2 million.
Plus’s market exist means the country’s two largest operators Vodafone and Telekom Albania (former AMC), which have been operating in Albania since the early 2000s, are due to increase their market shares by 2.5 percent each.
Meanwhile, no immediate effect is expected for Turkish-owned Albtelecom, the third largest mobile operator which launched its operations in early 2008, breaking the then-duopoly by increasing market competition.
Few months ago, Albania’s Competition Authority failed to find evidence of an alleged price-fixing deal in the country’s mobile communications market following a probe into the main three operators as they almost simultaneously increased subscriber costs during the past one and a half years.
The probe came after, the country’s main three mobile operators cut their monthly pre-paid packages to 28 days, down from a previous 30 days, indirectly increasing costs for prepaid users who account for the overwhelming majority of 92 percent of active mobile subscribers.
A year later, in March 2017, the three main mobile operators changed the key standard packages in the course of 2 weeks in common changes that lifted unlimited internet at reduced speed and cut international airtime.
Plus Communication, the only Albanian-owned operator, with a market share of 5 percent was not involved in the probe as it has kept its 30-day package unchanged in a bid to attract new subscribers and compensate for its network coverage and internet access limitations in some parts of the country.
The competition watchdog had earlier warned the mobile phone market has the structure of an “oligopoly market with an operator having a dominant position in the respective retail mobile services and two other operators having stable market shares.”
Albania’s mobile operators struggled to significantly increase their income for the fourth year in a row amid tougher competition leading to lower rates and increasing use of smartphone apps replacing traditional call and text message services.
Mobile operators’ revenue slightly rose by 2.4 percent to 33.9 billion lek (€250 million) in 2016 after hitting a decade-low in 2014, according to a report by the electronic communications regulator, AKEP.
Latest 2016 data shows leading Vodafone Albania operator, part of UK-based giant Vodafone Group, continues dominating the mobile market with 48.6 percent market share in terms of revenue, followed by Telekom Albania (former AMC), part of German Deutsche Telekom with 30.7 percent, Turkish-owned Albtelecom with about 12 percent, and Albanian-owned Plus Communication with 5 percent share.
The number of active mobile phone users, defined as those that have made or received at least a call or SMS in the last three months, slightly dropped to 3.4 million in 2016. About half of the active users, some 1.7 million subscribers had access to 3G and 4G services.
In its annual report, AKEP said pre-paid subscribers not using promotional offers face tariffs up to 14 times higher than the average rates of 2.83 lek (€0.02) /minute VAT included for 2016.
