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Telenor’s Serbian Unit Loses Market Share as Competition Rises

Telenor DOO, the Serbian unit of Telenor ASA (TEL), the Nordic region’s largest telecommunications operator, saw its market share shrink in the Balkan country as Vip Mobile DOO, Telekom Austria AG (TKA)’s mobile services unit stepped up competition.

The Fornebu, Norway-based Telenor and MT:S, the mobile arm of state-owned Telekom Srbija AD, had their market shares decline to 42 percent and 38 percent, respectively, last year, from 44 percent and 39 percent in 2011, the Agency for Electronic Communications in the capital Belgrade said in a report today. Vip Mobile said it increased its share of customers as they switched operators lured by better offers.

The market comprising mobile and fixed lines, media content distribution, voice-over-Internet protocol and Internet services declined 3.7 percent to 1.54 billion euros ($2 billion) in 2012 from a year earlier, mostly on fewer fixed lines, the prices of which also fell amid increasing use of Internet-based calls, according to the report.

“The trend of declining revenue from long-distance calls continued as a result of users having more convenient options,” the regulator said. This contributed to a 16 percent drop in revenue to 373 million euros in “the segment where subscription fees are now the most stable part.”

Fixed lines were still the second-biggest part of the telecommunications market, accounting for 24 percent of total revenue, from 28 percent a year earlier. The mobile services market expanded to 850 million euros last year from 846.7 million euros in 2011, according to the regulator. The number of all mobile clients fell 1.7 percent to 9.14 million in 2012 from a year earlier, it said.

Vip Mobile

Vip Mobile increased its share of Serbia’s mobile users to 20 percent last year from 16 percent in 2011, and its share of the revenue rose to 19.5 percent from 17.6 percent a year ago, according to the report.

VIP attracted more than a half of all users who changed provider since number portability became available in Serbia in July 2011 offering better terms and services, the company said in an e-mailed statement on May 7. A total of 115,000 mobile subscribers switched operators by the end of 2012, according to the regulator.

Mid Europa Partners LLP’s Serbia Broadband, or SBB remained the biggest provider of media content in Serbia, keeping 57 percent of the 109 million-euro market, followed by a Telekom Srbija unit, which controls 10 percent. The revenue from media content rose 13 percent from a year earlier as the number of clients increased 8 percent to 1.44 million.

To contact the reporter on this story: Misha Savic in Belgrade at msavic2@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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