Telenor, MTS deny accusations of collaboration

29 Jan 2021

Telenor Serbia and state-backed Telekom Srbija – which operates under the MTS brand – have issued statements denying reports of a planned merger of the two companies, after the pair were accused by rival operator SBB of cooperating to reduce SBB’s market share, with the intention of suppressing media freedom in Serbia. N1, the news agency owned by SBB parent company United Group, initially claimed to have seen documents showing that Srbija was planning to hand Telenor a complete cable network and TV content with the aim of reducing SBB’s market share to below 30%, thereby undermining United Group’s capacity to fund its media businesses – such as N1. Subsequent reports from N1 noted that Telenor had signed a series of contracts to lease access to MTS’ infrastructure, but reiterated its position that the agreements are intended to harm SBB.

MTS dismissed the claims, but confirmed that it intends to lease access to its fibre optic infrastructure to Telenor on commercial terms. The company noted, however, that the agreements with Telenor are not exclusive and that Telenor is ‘only the first’ company with which it has struck such a cooperation deal. The provider stressed that the proposals are in line with the law and with best practices in Europe and highlighted that the deals are subject to approval from competent regulators. Further, MTS argued that the pact represents the start of the liberalisation of its fibre-optic infrastructure.

In a statement from the Czech-owned operator, meanwhile, Telenor also denied the accusations, explaining that there are no plans to merge with MTS, nor will it take ownership of the state-owned telco’s infrastructure and that its business plans will not endanger media freedoms in any way. The operator confirmed that it does intend to ‘enter the field of internet and TV content’ in Serbia and, although it does not have any specific product or service to announce yet, it is developing possible future offerings. To that end, the company is openly talking to all potential media content providers and other partners. Explaining it decision, Telenor said that there were very few players in the segment: ‘We want to introduce a new and different offer, and not remove any existing ones from the market. The emergence of a third competitor in this area brings market liberalisation, healthier competition, new investments and benefits for all.’ The company also shed some additional light on the context of the deal, explaining that although its infrastructure in Serbia is ‘very good’ – with over 2,200 base stations and 6,100km of optical fibre – to ensure it has sufficient capacity it leases infrastructure from partners such as SBB and Telekom Srbija.

The development is the latest in a long-running media battle between SBB parent United Group and state-owned Telekom Srbija, with the two firms also controlling or having substantial sway over the nation’s most prominent news outlets. As noted by TeleGeography’s GlobalComms Database, the two companies hold a virtual duopoly in the broadband market and divisions between the two competitors have been exacerbated by their political affiliations, leading to an acrimonious and litigious feud. Mobile provider Telenor has for the most part remained on the side lines of the pair’s disputes and seemingly wishes to remain neutral. In its statement, the operator stressed its intention to operate ‘without interfering in politics’ but warned that it is ‘considering the legal remedies available’ to it to protect its reputation from ‘unfounded and untrue attacks.’

Serbia, SBB, Telekom Srbija (MTS), Telenor Serbia