Telekom Srbija has made remarkable progress in the last three years through both organic growth and a series of important acquisitions.
However, it has at the same time become embroiled in a bitter dispute with its main competitor United Group which came to a head a few months ago following a controversial agreement between the incumbent and Telenor Serbia.
More recently, it has also raised a few eyebrows by seemingly overpaying for the rights for the Premier League (EPL) and agreeing to buy the cable operator Posta net in a deal the details of which have left many confused.
The EPL rights, which are exclusive for six seasons starting 2022-23 and cover Bosnia & Herzegovina, Croatia, Kosovo, Montenegro, North Macedonia and Slovenia as well as Serbia, will cost Telekom Srbija around €100 million a season. This is over 700% more than the current contract, held by United Group’s Serbia Broadband (SBB). Covering all but one of the former Yugoslav territories (Kosovo), it is worth some €12 million a season for the period 2019-22.
Telekom Srbija has also invested heavily in other sports rights, including Serie A and NBA, amid accusations from United Group that it is, with Serbian state funding, competing unfairly in the market. The telco has countered by saying it is making purely business decisions.
The Posta net deal, which was first reported in July and confirmed last month, will see Telekom Srbija take over what is effectively part of Serbian Post, providing cable and internet services to several tens of thousands of subscribers. While the latter make Posta net a smaller player, acquiring it will raise Telekom Srbija’s share of the cable market to 54.6%, ahead of SBB’s 46.7%.
The main problem with the transaction is that it has been unclear what Telekom Srbija has actually agreed to buy – Posta net’s infrastructure or subscribers or both. This has not been helped by contradictory statements from both parties, although now it appears that the deal involves only the infrastructure and Posta net’s subscribers will be made “special offers” by the incumbent.
It is also being asked why there was no tender process for Posta net in order to obtain the highest price for the operator. Furthermore, the financial details of sale to Telekom Srbija have not been disclosed.
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