Telekom Austria’s Mobilkom wins Serbian licence

8 Nov 2006

Telekom Austria has announced that its wholly owned wireless subsidiary Mobilkom has won the tender for the third mobile licence in Serbia. The company was the sole contender for the combined GSM/UMTS licence, for which it will pay the Serbian Regulatory Authority its asking price of EUR320 million (USD408 million); the Serbian government is expecting full payment to be made this year. Boris Nemsic, CEO of the Telekom Austria Group, was reported as saying that while the licence price was relatively high, he expected the Serbian business to be profitable within three years of launch, by which stage CAPEX investment in the network is set to reach EUR250 million. The terms of the licence stipulate that Mobilkom must launch services within six months and provide coverage to 20% of the population within a year. The network must be extended to cover 50% within two years and 80% within four.

The latest licence acquisition reflects a continuation of Telekom Austria’s strategy to develop mobile markets in south-eastern Europe. The company has already launched services in Croatia and Bulgaria but earlier this year was thwarted in its bid for a mobile licence in neighbouring Slovakia. In August this year its bid to acquire Serbian cellco Mobi063 was also unsuccessful when Telenor outbid it with an offer of EUR1.51 billion.