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The Board of Citizens for monitoring the sale of Telekom

21. April 2010. | 07:12

Source: EMGportal

A group of intellectuals and telecommunications experts, who oppose the sale of the state’s major share in Telekom Srbija, proposed at α round table establishment of a board of citizens that would monitor activities of the Government of Serbia in the process of the company sale, and inform the citizens about consequences of the Government’s decisions.

A group of intellectuals and telecommunications experts, who oppose the sale of the state’s major share in Telekom Srbija, proposed at α round table establishment of a board of citizens that would monitor activities of the Government of Serbia in the process of the company sale, and inform the citizens about consequences of the Government’s decisions.

The decision of the Government of Serbia on the sale of Telekom as “a golden hen” that brings huge profits is wrong and can have bad consequences – this was said at a round table organized by the portal Balkanmagazin and the Republika magazine.

Underlining that in many European countries telecommunications operators in the state ownership are dominant in the market and operate successfully, a group of intellectuals and telecommunications experts who oppose the sale of the state’s major share in Telekom Srbija, proposed at today’s round table establishment of a board of citizens that would monitor activities of the Government of Serbia in the process of the company sale, and inform the citizens about consequences of the Government’s decisions.

In their conclusions after the discussion at the round table on justification of the sale of Telekom, they invited the Commissioner for Information of Public Importance, Rodoljub Sabic, to supply answers to the questions posed in an Open Letter to the President of Serbia, Boris Tadic, in regards to the Government’s decision on the sale of the Telekom Company.

The signatories to the open letter to President Tadic requested from the ombudsman, Sasa Jankovic, to stop the implementation of the Government’s decision on the sale of Telekom, explaining that it could be harmful for citizens of Serbia.

The letter was sent to Tadic on April 6, ten days after the Government’s announcement on its intention to sell 40 percent of Telekom’s shares. Not even one of the posed 11 questions has been answered so far, and no one of the invited from the cabinets of the President and Prime Minister of Serbia showed up at today’s discussion on this issue although they had been sent the invitations.

About 1,500 citizens supported the experts’ open letter to the President of Serbia with their signatures. All of them think that the decision on the sale of Telekom is of strategic importance and therefore the public should know what experts have prepared the justification analysis of the company’s major share privatization, and in what way the disastrous consequences for citizens and the employees of Telekom will be prevented when the state ceases to be the company’s major owner.

At the end of last week the Government of Serbia announced a tender for selection of a privatization advisor in the sale of 40 percent of Telekom’s shares and, as announced, an invitation to interested buyers will be announced during the summer. Explaining why Telekom should remain in the state ownership, participants of the round table pointed out that it is a company that brings significant revenues and stimulates the domestic economy, adding that privatization doesn’t have to mean a lower price of services for citizens.

After the sale – dismissals

“There is justified fear that a future major owner of Telekom will maintain the monopoly in landline telephony in Serbia over a longer term and record huge profits on the basis of it, since no rival companies will be able to rapidly construct the infrastructure that has been constructed by Telecom for more than 100 years. Even developed countries, such as Belgium, Sweden, Finland, Norway, Italy and Slovenia haven’t given up the major share in their telecommunications companies.

However, it can be expected that the new major owner of Telekom will dismiss a lot of employees and close the company’s door for domestic experts and suppliers of equipment, without guarantees for expected large investments,” says Aleksandra Smiljanic, former Minister of Telecommunications (in the previous council of the Government of Serbia), denying that the landline telephony in Serbia is in bad shape, which is mentioned by representatives of the Government as one of the arguments for the sale of Telekom.

As for the service quality, Smiljanic underlines that in Serbia there are 41 telephony lines per 100 citizens, which is above the European average.

Domestic state monopoly is better than a foreign one

“The Government hasn’t announced whether it intends to sell the infrastructure of Telekom as well. Telekom owns the entire telecommunications infrastructure of Serbia, which connects all the citizens, companies, state administration, police, the army…

And while the state owns Telekom it can provide telecommunications services to these users in the safest possible way. Telekom also brings huge revenues amounting to about a billion Euros a year and can stimulate development of the economy by purchasing equipment, software and services from domestic manufacturers.

Of course, Telekom also fills the budget of Serbia,” Smiljanic said, underlining that “regardless of liberalization of the telecommunications market, no new companies can reach the level of Telekom, especially due to the existing infrastructure and services, which guarantee revenues and profit to this company, as well as the state as its major owner.

After the sale of Telekom the profit will leave the country; this will negatively influence the foreign trade deficit, which will increase. At the same time, dismissal of employees will occur, not only in Telekom but in the entire industry that works for the company.

“There is a danger that, in the form of privatization, the state monopoly of Serbia might be sold to a foreign, state-owned enterprise. If something has to be a monopoly, it would be better if it is in the state, domestic ownership, than in private ownership,” says Professor Mladjen Kovacevic PhD, Regular Member of the Academy of Economic Sciences.

Sale ordered by the IMF

Kovacevic said that the current authorities in Serbia urge the privatization of Telekom for two reasons: due to the dictatorship of the IMF, on which we are more and more dependent and which demands restructuring of public enterprises, and due to the huge public debt.

“Announcements of Prime Minister Mirko Cvetkovic that Telekom should be sold so that Serbia could show that it is not a socialist country, and that the state cannot provide for good management of the company, are groundless. Besides, it is not precisely said what is on sale – only the company’s shares or the network infrastructure as well, which means that a future owner can choose whom he will offer the service of landline telephony,” Kovacevic says.

This economist thinks that “Telekom should be led by professionals and not party people. In the case that such experts cannot be found in the country, they can be found abroad. It is better to pay them well than sell Telekom. With the sale of Telekom we are cutting the branch we are sitting on, since telecommunications are the spine of a country’s development.”

Speaking about negative consequences of the announced sale of Telekom, Dean of the Faculty of Electrical Engineering, Professor Miodrag Popovic PhD, underlines that such a decision could have long-term, harmful effects on development of telecommunications in the country, weakening of industry and exports.

“On selling Telekom we have to take care about security issues of the army and police, to whom this company provides its services,” Popovic pointed out, adding that “experience of the countries in the region shows that the price of telephony services increased after privatization of telecommunications companies”.

The Union against the sale of Telekom as well

“The employees of Telekom want the state to remain the company’s major owner. With the sale of Telekom the state of Serbia is giving up the revenue from the big investments it has carried out in the Republic of Srpska and Montenegro, and it will also have big problems with the workers who will lose their jobs in Telekom when the new owner arrives,” underlined Miroslav Joksimovic, President of Telekom’s Union.

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