Mobtel

cancelled

Mobtel or Telecommunications Srbija BK-PTT was awarded a renewable 10-year license to provide mobile phone services in Serbia. The company was formed as a joint venture between state-owned PTT Serbia (49%) and the Moscow based trading and construction company BK Trade (51%). The latter company, in turn, was owned by Serbian businessman Bogolijub Karic in the Bogolijub Karic Group (BK Group). The company was initially awarded 20 years exclusivity in the mobile services, but the Yugoslavian government awarded another license to the Greek-Italian consortium OTE-STET which bought a stake in the Serbian telecom company. The network started services in early 1997. The initial network was installed at a cost of US$130 million by Ericcson. The company awarded another contract to Ericsson worth US$60 million in order to expand capacity in Belgrade in May 1998. The financing was done through the private partner. In January 1999, Mobtel and Ericsson signed a contract worth US$210 million for the expansion of Mobtel's GSM network in Serbia. The equipment would be delivered and installed by 2001. In June 2002 Mobtel and Ericsson signed a $US105 million contract to expand and enhance Mobtel's GSM 900/1800 network. Ericsson was expected to be the sole supplier of equipment, software and services in the expansion. In 2003, the government was facing obstacles in its attempt to reach an agreement with BK Trade so that the state could take control of the firm and sell it to a foreign investor. In mid-September Srdjan Blagojevic, the general director of the state-owned post and telephone company, PTT Srbija, which owned 49% of Mobtel, was sacked for making an unauthorised deal that would have raised PTT Srbija's stake to 55%. Mr Blagojevic was dismissed by Marija Raseta-Vukosavljevic, the minister of transport and telecommunications, who had herself been accused by the opposition G17 Plus party of helping criminal gangs to launder money through privatisations. By end 2005 Mobtel had around 2.6 million subscribers and was the sharing the market only with Telekom Srbija's mobile unit. In January 2006, Serbia’s government suspended Mobtel’s operating licence, following claims that its owner – Bogoljub Karic – breached licence terms and damaged national security by ceding control of wireless operations in Kosovo to Mobikos, a company owned by Kosovan businessman Ekrem Luka. Government of Serbia gave the control of Mobtel to Telekom Serbia. PTT Serbia is now Telecom Serbia. In April 2006 the government formed Mobi 63 to replace Mobtel, whose license was suspended for alleged illegal activity. 100% of Mobi 63 was then sold to Norway's Telenor for $1.9 billion in mid 2006.