The saga of the privatization of Albtelecom

By Alba Cela
In the busy economic agenda of the Albanian government one item stands out for the prize of most lingering issue: the privatization of fixed-line monopoly Albtelecom.
The telecommunications company owned by the state has been listed for sale since 2001. In a legal declaration approved by president Rexhep Mejdani clear rules were set out to give no more 76 percent of the shares to a strategic investor. The privatization has been problematic from the outset because it was surrounded by political contestations and conspiracy theories about the group of people who would get a generous share of the sale’s proceeds depending on the client. The Nano government decided upon the Turkish telecommunications company “Calik Enerji Telekomunikasyon A.S” and was immediately crucified by the opposition. The offer of 120 million euro was not deemed appropriate. An investigation by the well-known auditor Deloitte made it clear that Calik was far from being a strategic investor. Claims that the company was not only unsuitable but also had corrupted Mr. Nano himself became the signature mark of parliament sessions as well as media declarations.
July 2005 happened and the administration changed hands. On October 13 of 2005 the new government did not approve the sale contract. Soon the issue took an interesting turn of 180 degrees. Moving away from its initial position, the right-wing coalition started again negotiations with Calik. Prime Minister Berisha was photographed in Turkey in September of 2006, smiling much too friendly to the Turks on this issue. The visit of Turkish Foreign Minister Kursat Tuzmen had on its agenda the quickening of the process.
In the meantime Calik and Turkish Telecom formed a consortium which got closer to the Albanian expectations of a strategic investor, worth the Albanian telecommunications monopoly. Albtelecom instead got involved in scandals about tenders supposed to extend the IP services throughout the country. The open tender was for the purchase of 200.000 ports while the capacity to install is only one fourth of the sum. The Turkish side objects to the tenders being held in the context of the Internet program.
A parliamentary commission investigating Albtelecom and the IP tenders published a report outlining severe structural problems that eventually lead once again to corruption doubts.
After an impressive display of multiple circular turns and overturns, we are at point zero. The negotiations are frozen once again due to the serious power crisis and the local elections. The Albanian consumer is left wondering at the slow inefficient, clumsy process which has never been transparently outlined to them. And yet the major interest rests with the consumer. A successful privatization of Albtelecom would bring bouquets of benefits to the Albanian breadwinner such as lower prices for fixed line services, a third mobile operator called Eagle Mobile which would definitely cut across the absurd quasi-cartel structure of the foreign-owned mobile operators in the market, qualitative improvements in Internet providing and a realistic upgrading of the general communication system. In the age of information and communications one could never hope for more.
In the face of the above arguments one cannot help asking why then is this issue postponed? In whose interest is it to keep these much needed improvements from Albania consumers who are ripped daily by outrageous fees for services which cost half as much in other countries of the world?
Ten years ago Albtelecom had a profit of 4.5 billion leks. Today despite its structural problems it has a generous bottom line that someone is not willing to let go. Hence, it remains in the hands of the government to take quick and resolute steps in finalizing the sale of this state asset worth no less than 1.2 billion euros that has been lingering for too long. The problem calls directly for more transparency, more efficiency in delivering to the consumer a needed service and for more responsibility on the side of state officials, especially the Ministry of Telecommunications, under whose jurisdiction the issue falls.