Serb Landline Providers to Take Portability Delay to EU

Serbia’s fixed-line phone companies, including Mid Europa Partners LLP’s Serbia Broadband, plan to file a complaint to the Constitutional Court and the European Union about a delay in number portability.

Serbia’s Agency for Electronic Communications failed to fully open the 446 million-euro ($581 million) market by giving state-owned Telekom Srbija AD, the dominant provider and former monopoly, another year to prepare for portability that was supposed to begin in 2012, Serbia Broadband, or SBB, said in an e-mailed statement. The delay to March 2014, announced this week, affects three providers, including a unit of Telenor ASA.

“We intend to seek protection before the Constitutional Court” and “will consult with relevant bodies in the EU” about the delay that’s “damaging to owners,” including the European Bank for Reconstruction and Development, said SBB, Serbia’s biggest cable provider that entered the landline market in 2012.

Seeking to join the EU, Serbia changed laws to allow more competition and end monopolies, including in energy, telecommunications and transportation. Mobile number portability began in July 2011.

“Without being able to keep their numbers, users are very reluctant to switch to a new provider,” said Slobodan Djinovic, chief executive officer of Orion Telekom DOO, Serbia’s second-biggest internet provider, in a phone interview. Orion was the first to challenge Telekom’s landline monopoly, in 2010.

Landline Users

Both Orion and SBB have the EBRD as a minority stakeholder and “need to explain to investors that the business plan for 2012 may not be fully achieved,” Djinovic said. The two operators have 34,000 landline users combined, compared with Telekom’s 3.03 million, according to the agency’s data.

The dominant provider has “undertaken all necessary activities to ensure technical and other conditions for portability,” Telekom said in an e-mailed comment, adding it would honor the new deadline.

Still, the delay “effectively extends the monopoly of the state operator, which is contrary to laws and agreements so far” with the government, Telenor’s chief in Serbia, Ove Fredheim, said in e-mailed comments. The state’s failure to free up the market as agreed “inflicts direct damage to the operations of Telenor” in Serbia, Fredheim said.

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