Albtelecom to launch mobile unit in 2004, targets strategic investor

TIRANA – The manager of Albania’s state-owned Albtelecom said yesterday it planned to start a mobile phone company to help attract a strategic investor for the fixed-line monopoly next year. Apostol Noti said Albtelecom owned 100 percent of the newly registered, GSM-standard Eagle Mobile and hoped to launch services in the middle of 2004 after obtaining government approval and buying the technology. Albtelecom will be venturing into a market dominated by Albanian Mobile Communications, which is owned by Greece’s CosmOTE and Vodafone Albania, a partnership of Greece’s Vodafone Panafon and the UK group Vodafone. «We plan to invest 18.5 million euros ($22.4 million) to cover a market of 100,000 subscribers,» Noti told Reuters in an interview. «Undoubtedly, it will not be easy to compete with these operators, who have 1 million subscribers between them. But I see (Eagle Mobile’s) entry into the market with optimism,» Noti added. The Albanian government plans to offer from 51 to 76 percent of Albtelecom next year in the first quarter or later. The government approved the allocation of a third mobile phone license to Albtelecom as a means of sweetening its package to strategic investors, who did not show at a previous sale attempt last April. Noti said Eagle’s chances as a third operator would profit from the existing infrastructure base of Albtelecom, the only fixed-line operator in Europe without a mobile operation. All international calls pass through Albtelecom’s network. Noti said he also took into account the fact that a third operator has been known to bring price equilibrium to the market and to re-balance tariffs. Primed for sale The Albanian government has twice postponed the sale of Albtelecom after strategic investors failed to show interest, partly because of woes suffered by fixed-line companies worldwide and partly because of Albtelecom’s own troubles. «We are trying to boost Albtelecom’s efficiency by solving gradually the old problem of debt, taking it to the market without any debts to international operators,» Noti said. Albtelecom successfully negotiated payment of part of its $14.6 million debt, accumulated in the 1989-1992 period when communism was crumbling in Albania, he said. It was in talks to settle the remaining part by year’s end, Noti added. Foreign consultants had also said a joint venture between Albtelecom and New World Telecom of the United States hurt its sale chances. Noti said the two sides liquidated the joint venture in court. Albtelecom had a profit of 11 million dollars in 2002. It also wrested $1.6 million this year from tax authorities after a prolonged fight, clearing another sale hurdle. Its staff has also been cut to 2,750 from 4,573 in 2000. Noti rejected calls from pressure groups attacking its increase in urban call prices. «We are doing nothing less than following the EU countries by offering cost-oriented prices.»