Deputy Prime Minister and Minister of Trade, Tourism and Telecommunications Rasim Ljajić stated that six bids have arrived for the privatization of Telekom Srbije.
“We are more than happy with this level of interest. When we tried to sell Telekom four years ago there was only one bid, and it was unsatisfactory. Recently, the Slovenians tried to sell their Telekom and there was only one bidder, who also quit”, he said.
Ljajić said that during the next 14 days the privatization advisor for Telekom, the French company Lazard, will analyse the bids to determine whether they meet the tender requirements.
Speaking in the “Pravi ugao” show on the Radio Television of Vojvodina, he said that he cannot say who submitted bids for purchasing a majority share in the Serbian state-owned telecommunications company, but said that among the seven interested potential buyers submitting non-binding bids, only one had quit.
“I cannot speak of any of the bidders. The provision and opinion of the privatization advisor is not to publish names or any type of speculation regarding the price, in order to obtain the best quality offers and increase competition”, he noted.
Ljajić said that the privatization advisor will rank the bids, governed by price, as well as the other two important factors – the social and economic programme.
“One option is that none of the bids are satisfactory, and in that case we will not sell Telekom, possibly we may request revised bids. Another variant involves selecting the best bidder and continuing negotiations with them through the next 30 or 40 days”, Ljajić explained the next steps in the privatization procedure.
Asked whether mentioning the social programme means that after the privatization there will be layoffs in Telekom, Ljajić said this is inevitable.
“We should not lie to ourselves, Telekom has 9,000 employees, and with subsidiaries in Republika Srpska and Montenegro they amount to around 13,000, while for example, its competitors in our market, Telenor and VIP, have far fewer. No one can support that number of workers, but employees in Telekom will receive the largest severance pays to date”, said Ljajić.
The Deputy Prime Minister stated that Telekom holds 44 percent of the domestic mobile telephony market, but still has less income than Telenor.
“A fair share of this is the consequence of such a large number of employees”, he noted.
He said that the state is not selling Telekom on a whim or for political reasons, nor for budgetary needs.
“I ask all opponents of privatization if they can say the telecommunications market improve in three years – no one can know this. Large investments are required, without new investments the game cannot be sustained, and we are doing this for the good of Telekom”, he explained.
Responding to union criticism that Telekom would be doing better if the company had not purchased companies in Montenegro and Republika Srpska for political reasons, Ljajić admitted that those two companies are generating losses.
“However, now they will increase the price of Telekom. Everyone wants to expand, no one wants to enter a small market, and only regional players will survive”, he noted.
Ljajić rejected the allegations that privatization must mean that prices of Telekom services will increase in the future.
“There are three participants on the domestic market and they will fight for their share”, he added.
Regarding speculation in domestic media that the privatization advisor Lazard may be under conflict of interest, because they are in alleged business contact with the American Apollo investment fund mentioned as a potential buyer for Telekom, Ljajić said that the Government checked those allegations and that the two companies had no common business during the past several years.
He also rejected the media allegations that Telekom would be sold to the Russians, for political reasons.
“If Eskimos were to come and offer the best price – they could have Telekom. We will not be guided by political reasons”, concluded Deputy Prime Minister Ljajić.
