Telekom wants Telenor as justification before European Commission

The contracts on cooperation between the state owned Telekom Serbia and private Telenor have the goal of destroying the competition – the SBB cable services provider and United Media TV stations – but there is another goal according to the documents that N1 has had access to. Under the cooperation plan which was signed by Telekom CEO Vladimir Lucic, bringing Telenor into the cable operator business should serve as justification before the European Commission, saying that the claims that competition is being suppressed in Serbia and that Telekom gets preferential treatment are not true.

The documents that N1 has seen show that this is cooperation with two goals. The most frequent word in Telekom’s analysis of benefits from cooperation with Telenor is toppling the third player on the market and that is on the papers intended to destroy SBB signed by former Internet and multi-media coordinator turned CEO Vladimir Lucic. “By toppling SBB, Telekom Serbia will be left as the only content provider with an opportunity to launch new channels and earn income from both Telenor and users,” the plan says. Just a few rows down, the document says that Telekom is planning to toppled SBB and use its cooperation with Telenor as proof of healthy competition since a new player is being brought into the cable network and multi-media market.

“SBB has already appealed to the European Commission, saying that the state is favoring Telekom Serbia and trying to create a monopoly on the telecommunications and media market. Renting out optics and ADSL is the best reply to those accusations,” the plan says.

Professor Petar Djukic, former member of the Commission for the Protection of Competition, said that the fact that Telenor is entering the cable operator market does not in any way mean more competition but the creation of a monopoly or duopoly with Telekom as the senior partner. “I am surprised that someone allowed themselves to remain alone on the market through some procedure. Even worse is the possibility of two competitors stating in a document or memorandum that the third party on the market won’t be able to recover and will definitely stop operating once in the way it operated to date. The intention of those market players to remain alone is all the more obvious which means that this jeopardizes competition which is against the law and good customs. In the final analysis, this runs counter to the interests of the consumer,” Djukic said.

If Telekom Serbia has a surplus of installed capacities it should organize an auction to rent them out, former Telecommunications Minister Aleksandar Smiljanic told the Association of Journalists of Serbia (UNS). “It’s normal for Telekom to rent out its free capacities to other operators but that has to be done under equal conditions,” she said. That means the conditions offered to Telenor have to be offered to SBB, VIP and other cable operators in Serbia if they are interested.

SBB sent a number of requests for that kind of commercial cooperation but never received a reply.

Lawyer Vladimir Homan told N1 that he doesn’t see how Telekom-Telenor cooepration could be interpreted as increasing competition by the Serbian Commission for the Protection of Competition or the European Commission. “That is not done in civilized countries. We have a law to protect competition and this is in violation of everything in it. It is a restrictive agreement. They will have more than a 40 percent market shares. It’s tragic what the state is doing because (Telekom Serbia’s) MTS is our company, belongs to every citizen of Serbia and that is something that should not be done and something that the European Commission should appreciate,” Homan said.

If SBB really is toppled as the Telekom-Telenor plan says, the consequences will be dramatic, The Center for Investigative Journalism’s (CINS) Branko Cecen warned. “This is naked Putin-esque throttling of our right to be informed freely. This is a scandal that a significant part of this society’s future depends on. A step further into dictatorship, deeper into a deaf and blind society,” Cecen said.

Telekom and Telenor signed three contracts which have been submitted to the Commissiont for the Protection of Competition:

• Contract on the use of optic cables


• Contract on Ethernet Bitstream services


• Contract on the maintenance of optical cables

The Commission should first decide whether has the competencies to rule on the contracts and if it says it does it can then decide whether they are restrictive, that is if they inflict damage on the competition.