Crnogorski Telekom

active

In April 2005, the government of Montenegro finalized the sale of its 51.12% stake in Telekom Montenegro (TCG) to Hungarian Matav for Euro 114 million (US$147 million). At the same time Matav acquired an additional 21.92% of TCG's shares from minority shareholders for EUR 2.2 per share, resulting in a purchase price of EUR 22.9m. The stake was sold through competitive negotiation. In January 2005, Matav was selected to enter into exclusive negotiations to acquire Telekom Montenegro. The agreement was upon conclusion of the Share Purchase Agreement, Matáv would acquire 51.12% of the shares for Euro 114m from the Government of Montenegro and submit an offer to the minority shareholders to acquire an additional stake of up to 48.88%. The maximum price offered for 100% of TCG by Matáv would be EUR 165m, which would mainly be financed from debt. Telekom Montenegro had around 195 thousand fixed access lines and operated with a lines/employee ratio of 167 in 2004. The fixed-line penetration was 31.4%at the end of 2004. TCG Group had 1,389 employees at the end of 2004. MoNet, TCG's mobile subsidiary was Montenegro's second largest mobile player with 179 thousand revenue producing customers, giving it a 42% share in a market with an estimated penetration of 68%. After its divestiture, the company was rebranded as Crnogorski Telekom (CGT). By 2005, CGT was the holder of the only license issued for fixed line telecommunications services in Montenegro although the period of exclusivity provided by Telecommunications Law published in 2000 expired at the end of 2003. The license allowed CGT to provide domestic and international voice and data services as well as VOIP, leased line, public payphone, value added, etc. services. The telecommunications sector in Montenegro was regulated by the 2000 Law. The 2000 Law established the Telecommunications Agency with broad authority and instituted a licensing regime whereby all telecommunications activity must be licensed by the Telecommunications Agency. Prices of CGT must be approved by the Telecommunications Agency. At the time of the divestiture, CGT’s tariff structure was highly unbalanced, monthly access fees and local calls were inexpensive, whereas long-distance and international calls were very expensive, and businesses were charged approximately twice as much as individuals. During the privatization process, a schedule for the cost-based re-alignment of prices for access lines and traffic, rebalancing tied to the timing of market liberalization was agreed with the Montenegrin government. As of 2006, Crnogorski Telecom operates as two brands, T-Com the operator for fixed communication lines and T-Mobile, the operator for mobile communications (which replaced MoNet). T-mobile was granted a 3G license in May 2007. On May 1, 2009 Crnogorski Telekom a.d., T-Mobile Crna Gora d.o.o and Internet Crna Gora d.o.o were merged into one legal entity, Crnogorski Telekom a.d. The services were marketed under the T-Com and T-Mobile brands. In 2010 Crnogorski Telecom signed a US$3.9 million contract with Ericcson Nikola Tessla which covers he modernisation of the firm’s fixed network (T-Com Crna Gora) and the extension and upgrade of its existing 2G/3G mobile infrastructure (T-Mobile Crna Gora). As of end of 2011, the shareholders' structure of Crnogorski Telekom was Magyar Telekom (76.53%), Other companies (11.06%), Residential/Individual investors (11.84%), and privatization funds 0.57%. Therefore, the company is 99.5% private. Percentage private corrected for 2007-2011 according to information from annual reports from 2007-2011(See filling system) 2010 and 2011 connections - mobile subscribers only 2012 and 2013 capacity obtained by adding mobile and fixed line subscriber data. 2013 capex not available yet 2012, 2011 and 2010 capex from annual reports available at http://www.telekom.me/annual-reports.nspx