TK workers threaten further action over Z Mobile dispute

11 Nov 2020

The workers’ union of state-owned telco Telecom Kosovo (TK) – which operates under the Vala brand – has threatened to escalate its protests over the government’s failure to resolve the long-standing debt dispute with the operator’s former MVNO partner Dardafon (which offered services as Z Mobile until its closure in November 2019). According to local news outlets, negotiations concerning TK’s debt of around EUR25 million (USD29.5 million) to Dardafon broke down earlier this year, and in late October the former MVNO froze and then emptied TK’s accounts. Koha writes that around EUR2.7 million was initially withdrawn from TK’s account, followed by another EUR1.5 million over the subsequent ten days.

Without access to its funds, the operator is facing difficulties in maintaining its operations whilst its 2,300 employees have been left without pay. Commenting on the urgent need for a solution, TK’s Director of Public Relations Menduh Abazi explained: ‘Our day-to-day operations have become extremely difficult with these actions. An immediate solution to this issue is needed before the company and services collapse completely. With the collapse of our services can automatically collapse all the services of state bodies such as that of national security, such as KIA, Kosovo Police, Security Forces, Emergency and many other institutions.’

TK and the government have reportedly restarted talks with Dardafon over the payment of the dues, but the status of the negotiations is unclear. TK officials have claimed that Dardafon had rejected an offer to pay EUR250,000 per month prior to the freezing of the telco’s accounts, whilst more recent reports have suggested that the parties are close to agreeing a deal that would see the amount paid within two years.

As noted by TeleGeography’s GlobalComms Database, the amount owed to Dardafon is the result of an international court ruling in 2016 in relation to a dispute over the MVNO agreement between TK and Dardafon. The court sided with Dardafon and awarded the provider EUR32 million in damages and costs. Efforts by Dardafon to recover the dues escalated in 2019, amidst widespread complaints regarding the management of TK and allegations of impropriety at the telco. Whilst the original MVNO agreement was held up as example of incompetence and corruption in TK’s leadership – critics claimed that the deal was too generous and highlighted purported ties between Dardafon’s owner and certain political figures – a concurrent parliamentary investigation into TK’s financial difficulties uncovered rampant corruption and nepotism. The short-lived coalition government led by Albin Kurti dismissed the operator’s board in February 2020 over their handling of the operator.

Kosovo, Dardafon (Z Mobile), Telecom Kosovo (TK, Vala)