Montenegrin Government is preparing the establishment of state-owned telecommunications company

By Adnan Prekic – Podgorica

After extensive analysis of the feasibility of the project, the Montenegrin government is seriously considering the establishment of a new telecommunications company. After selling the national company in 2005 the government is re-thinking on forming a telecommunications company. According to the ideas of the government a new company would be based on the existing telecommunications infrastructure of state enterprises: Montenegrin Transmission System and Railway infrastructure company.

The Montenegrin Government will soon be able to decide whether to establish a new telecommunications company. Citing sources from the Government of Montenegro, the newspaper “Vijesti” conveyed that in July a report was filed that was in favor of making such decisions.

The idea of establishing the state telecom is there for several years, after the government realized that a large portion of traffic in this segment of the market outflows from Montenegro. After the state sold the national telecommunications company in 2005, there are currently several telecommunication operators on the Montenegrin market. Three key companies in the Montenegrin market are the dominant foreign-owned firms.

According to current data, on the Montenegrin telecommunications market annually is “turn” around 300 million euros. This amounts to about 10 percent of the entire gross domestic product of Montenegro. The largest part of the market belongs to Montenegrin Telecom, in which 76.5% of the shares is owned by Magyar Telekom, which is controlled by Deutsche Telekom.

The government explained that the expenditure on telecommunications services on an annual basis are huge and so on that point they are justifying the decision on establishing their own telecom. What goes in favor of the formation of the state telecom is the fact that there is already a good infrastructure for the provision of telecommunications services, and in the new telecoms, probably, most owners will be companies that are formal owners of cable and installation – Montenegrin Transmission System and Railway infrastructure company. In addition to these companies’ fiber infrastructure only owns Telecom Montenegro.

Montenegrin Telecom was privatized in 2005 with all of its infrastructure. State, over funds, owned slightly more than 51 percent of the shares that for 114 million euros bought Hungarian Telekom (a member of the Deutsche Telekom group). Hungarians have very quickly thereafter purchased an additional 25% stake in Telekom, and so they came to the super-majority stake and full control of the company.

Source: Independent Balkan News Agency (Montenegro)