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IMPLICATIONS OF TELEKOM SERBIA’S BID FOR IPKO OWNERSHIP

Ipko, Kosovo’s leading telecom operator, has been planned for sale since a few quarters. The auction has begun, with local sources claiming that at least 8 companies are interested in buying Ipko from the Slovenian incumbent Telekom Slovenije. Among them, the Serbian incumbent Telekom Srbija.

This does not come as a surprise: Telekom Srbija’s expansion strategy has been marked by an acquisition spree in the last years. In its home country, it swallowed a number of cable operators to form Supernova, as well as other telcos which were integrated into the MTS network. Abroad, it acquired smaller operators in Bosnia such as Elta and Blicnet and tried to buy others in Albania. All these mergers helped turn around the declining RGU trends in the span of 2 years, and put the group on a growth path again. Telekom Serbia’s interest in Ipko is a signal that this acquisition-driven strategy is not over, even if no major acquisition took place in the first half of 2020.

What does make this proposed acquisition special is its political character given the tense relationship between Serbia and Kosovo and the leader position of Ipko. Kosovar politicians and IT experts are already calling to block Telekom Srbija’s bid, citing national security concerns with a Serbian government-controlled entity taking control of vital infrastructure, while regulator ARKEP already took the step of effectively forbiding any ownership change without its prior agreement.

This is the second time that Telekom Srbija’s strategy faces political obstacles, after a failed attempt to buy the Albanian incumbent Telekom Albania in 2018. However, as the company stated, things are different with Ipko as Telekom already operates in Kosovo under the MTS brand. Telekom has reiterated that its acquisition is a “purely economic” operation, but with such opposition from the regulator and the politics, the deal seems unlikely to get through. However, one party stayed very silent since the beginning of the case, namely the seller Telekom Slovenije, which should have the last word at the end of the year.

Quentin Stallivieri

Market Analyst

Dataxis


July 23, 2020

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Quentin Stallivieri

Market Analyst

Dataxis


July 23, 2020

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