HT makes privatisation shortlist for P&T Kosovo
26 July 2011
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Deutsche Telekom’s (DT) Croatian subsidiary T-Hrvatski Telekom (HT) confirmed that it had been shortlisted by the Kosovo’s Komisioni Qeveritar për Privatizimin (government privatisation committee) as one of two pre-qualified bidders for a 75% stake in Posta dhe Telekomunikacioni i Kosoves Sh.A (PTK), the country’s integrated incumbent telco. Telekom Austria was the other pre-qualified applicant.
The stake was previously given a prospective value of EUR525m-EUR600m, although the government is reported now to be budgeting EUR300m.
In some reports, DT is listed as HT’s consortium partner. Other interested parties include Albtelecom, Orascom Telecom, and SabaFon.
Details of the tender are to follow, but the sale is expected to include only PTK’s telecommunications assets (including its wireline business Telecom of Kosovo and mobile arm Vala), but not its postal business (Post of Kosovo). The company has around 2, 500 employees.
PTK is Kosovo’s largest company, holding an exclusive wireline licence and one of two mobile licences (IPKO holds the other). It piggy-backs on the international dialing code of Monaco Telecom, which also provides other services, including international roaming, traffic management, SIM card provision, value-added services, handset provisioning, and fraud management. Monaco Telecom has partnered PTK since its formation in 2000, and worked with Alcatel-Lucent on network build.
The company reported revenue of EUR152m for 2010, up from EUR145m a year earlier, but below 2008′s EUR161m, and 2007′s EUR182m. It booked net profit of EUR33m in 2010, compared to EUR44m a year earlier, and EUR60m in 2008. PTK paid the government dividends of EUR200m in 2009, EUR80m in 2010, and EUR40m in 2011.
In both 2009 and 2010, mobile accounted for over 80% of revenue, fixed-line 12%-13%, and internet and postal services each below 2%. The fixed-line business shrank by 4% in 2010, while internet grew 35%, and mobile and post were both up by 6%.
- Kosovo has a population in the region of two million, and round 1.2 million mobile and 100, 000 fixed-line subscribers, with PTK estimated to have 67% market share. Vala is said to serve 90% of Kosovo.
- Rival telco IPKO, owned by Telekom Slovenije, reported falling sales in 2010, blamed on price competition. PTK is considered to have suffered from IPKO’s entry, but in recent years has also been accused of mismanagement and worse.
Calls for privatisation to be suspended amidst fraud scandal
PTK is currently under investigation by the European Union justice mission EULEX for fraud, apparently relating to contracts governing its mobile virtual network operator joint venture with Dardofon, Z-Mobile.
In June 2011, Chief Executive Shyqyri Haxha, Chairman Rexhe Gjonbalaj, and three Dardofon executives were charged with agreeing “harmful contracts”. There have been related allegations involving politicians, and the company has laid its own charges against former management.
On 8 June 2011, PTK released a statement indicating surprise at the charges leveled against its current executives, which it said were learnt via the media and had not been formally communicated to the officials concerned. While promising full cooperation, the company said the executives would remain in their posts, with a “presumption of innocence”.
Calls to suspend privatisation of PTK are complicated by the proceeds having already been factored into the country’s budget, with suggestions that a shortfall could precipitate a political crisis.
[Further reference: Parakualifikohen kompanitë për privatizimin e PTK-së -- Ministria e Zhvillimit Ekonmik, 3 June 2011; Kosovo picks 2 bidders for telecom sale -- Associated Press, 3 June 2011; Croatian, Austrian telcos to fight it out in Kosovo privatisation -- Total Telecom, 6 June 2011; Hrvatski, Telekom Austria Picked as Finalists for Kosovo's PTK -- Bloomberg, 6 June 2011; EU prosecutors indict Kosovo telecom, customs chiefs -- Reuters, 8 June 2011; Privatisation of Kosovo's PTK faces uncertain future -- SETimes, 16 June 2011; Vala: 4.2 million euro more -- PTK, 19 June 2011; Kosovo: PTK or how not to manage a public company -- balcanicaucaso.org, 7 July 2011; Corporate Overview -- Monaco Telecom, January 2011; Financial Statements and Independent Auditor's Report, 31 December 2008 and 31 December 2010-- PTK.]
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