Vega’s network assets split between Mobitel and Si.Mobil

25 Apr 2006

As reported last week, US-based operator Western Wireless International has agreed to exit its Slovenian cellular subsidiary, Vega, and, under the latest details of the deal, its network assets are to be split between its two local rival cellcos, market leader Mobitel and second-placed Si.Mobil, for a total of EUR5 million. According to fixed line incumbent Telekom Slovenije, its wholly owned unit Mobitel will purchase 191 of Vega’s GSM base station locations including all accompanying equipment for EUR2.5 million, whilst Mobilkom Austria subsidiary Si.Mobil will buy 135 base stations, also for EUR2.5 million. Si.Mobil reportedly had first pick of preferred base station locations to maximise improvements to its coverage, and therefore paid the same price as Mobitel for a smaller quantity of network assets. Si.Mobil said it would offer favourable terms for Vega subscribers to switch to its services; according to Vega, its customers will be able to continue using their existing service until the end of May whereupon it will shut down and users will have to port their number to a new operator.

Vega launched GSM services in 2001, but by the end of 2005 it was still by far the smallest operator in the country with 30,000 subscribers, having found it hard to establish much of a presence. Vega claims that its efforts were hampered by a flawed regulatory environment and the dominance of Mobitel, whilst the government argued that Vega’s poor standing was a result of its own bad decisions. In May 2005 Vega sued the government and Mobitel for SIT48.8 billion (USD254.6 million) in compensation for what it claims was the failure of state regulators to create a level playing field in the area of termination rates. However, all outstanding court cases involving Vega, its rivals and the state have been cancelled upon its announcement to exit the market.