December 21, 2016 / 12:16 PM / 7 months ago

State-owned Kosovo Telecom may face bankruptcy after court ruling, says CEO

3 Min Read

* Court orders Kosovo Telecom to pay 30 mln eur to smaller carrier

* The new country faces more arbitration court decisions

* Kosovo remains one of the poorest countries in Europe

By Fatos Bytyci

PRISTINA, Dec 21 (Reuters) - State-owned Kosovo Telcom might face bankruptcy after an arbitration court ruled it would have to pay 29.6 million euros ($30.8 million) to local mobile telecoms service provider Z-mobile for breach of contract, its chief executive said on Wednesday.

Agron Mustafa said his company would appeal against the case and asked the government for help following the decision by the London Court of International Arbitration.

Once the country's most profitable state-owned company, Kosovo Telecom suffered a 63 percent drop in net profits in 2015 to 6 million euros ($6.2 million).

"This is one of the most dangerous decisions taken by a court at the expense of Kosovo Telecom and seriously threatens the future of the corporation - even with bankruptcy," Mustafa said in an email to Reuters.

Privately held Z-mobile won a contract in 2008 as a mobile virtual network operator to use Kosovo Telecom's network and technology but complained that the state company did not issue sufficient SIM cards and has refused to offer 3G and 4G mobile Internet services.

No one at Z-mobile could be reached for immediate comment.

Kosovo Telecom employs some 2,300 people and is the country's biggest mobile phone services provider with a 54 percent market share. Z-mobile has around 8 percent of the country's 1.88 million mobile subscribers.

The second-largest mobile operator is IPKO, owned by Telekom Slovenije, with a 38 percent market share.

Kosovo abandoned an attempt to privatise Kosovo Telecom in 2013 when its parliament blocked a sale to German telecoms and technology investment firm ACP Axos Capital Gmbh and U.S.-based investor Najafi Companies for 277 million euros.

A previous group of would-be investors walked away when corruption charges were filed against Kosovo Telecom managers and directors. The people were later cleared of the charges.

Axos is suing Kosovo's government over the failed sale and local media say it may win between 50 and 100 million euros from one of Europe's poorest countries. ($1 = 0.9613 euros) (Reporting by Fatos Bytyci; Editing by Georgina Prodhan, Greg Mahlich)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below