Many suitors for Mobtel

VIENNA – Telekom Austria believes in the potential of the Serbian market, where it is bidding for the biggest mobile operator, Mobtel, as the next step in its central European expansion, its incoming head told Reuters. Boris Nemsic, a Bosnian Croat who will take the helm of Austria’s partly state-owned phone carrier later this month, said his company knew the market in Serbia well enough to judge better then other bidders how much it could grow. «Let’s not fool ourselves: you’ve got to be very bold to go there,» Nemsic said in an interview in his office at Telekom Austria’s mobile operator mobilkom, which he has headed for six years. «We believe very strongly in the Serbian market.» Telekom Austria, which already has assets in Bulgaria, Croatia and Slovenia, has been trying for years to buy Mobtel. Its plans seemed to have foundered when Serbia withdrew Mobtel’s phone license last year on allegations of improper deals. Serbia has since launched the combined sale of a fresh telecoms license, together with Mobtel’s assets, including its 1.9 million clients. Nemsic said the auction was run very professionally. «The history (of Mobtel) was characterized by big legal uncertainty, and the clear cut (new auction) is meant to provide legal certainty now,» Nemsic said. «This is what we’ll have to check in the data room.» Serbia has put a starting price of 800 million euros on the auction and invited bidders to express their interest in Mobtel, now rechristened Mobi63, by May 15. Vodafone, Deutsche Telekom, Spain’s Telefonica and Greece’s OTE – which already owns a stake in state carrier Telekom Srbija – or OTE’s mobile unit Cosmote are expected to bid. Nemsic said Telekom Austria’s Serbian experience gave it a better feeling for the potential of the market, where he said official data on what share of the population had mobile phones – «penetration» in industry jargon – were unreliable. «Penetration is at something like 40, 50, 55 percent. But penetration is for many reasons a very unreliable indicator,» he said, citing users who were not actually using their phones and could be inflating figures. «Look at Bulgaria: 82 percent penetration sounds great,» he said. «But a new operator there handed out free SIM cards on the street. Is this penetration?» Nemsic said he knew about Mobtel’s sales and earnings but declined to reveal them. (Reuters)