Z-Mobile agrees to waive EUR32m penalty to save PTK bankruptcy

25 May 2017

Privately-owned MVNO Z-Mobile has signed a deal with its host network, state-owned telco Post and Telecommunication Kosovo (PTK) – which offers services under the Kosovo Telecom and Vala brands – agreeing to waive a EUR32 million (USD35.8 million) fine imposed by a London arbitration court over a breach of contract. Kossova Press writes that Z-Mobile had taken the incumbent to court after the operator refused to allow the MVNO to offer 3G or 4G services and amidst accusations that PTK had not provided Z-Mobile with insufficient numbering resources. In December last year a London arbitration court ruled in favour of the MVNO, issuing a EUR32 million penalty against the incumbent. Under the agreement signed between the two parties, however, PTK will only pay out for Z-Mobile’s court costs and legal fees. PTK will also provide Z-Mobile with an additional 100,000 numbers and allow the MVNO to offer 3G and 4G services.

Commenting on the deal, PTK Director Agron Mustafa explained that the agreement avoided the potential bankruptcy of the telco – which could not afford the payout – and the laying-off of more than 3,000 employees. The official added that the move also avoided a second arbitration process and saved the country the ‘disgrace’ of not applying the decision of an international court. Senior Z-Mobile officials, meanwhile, suggested that the company had chosen not to forge ahead with the fine to prevent the collapse of PTK.