Kosova Airlines Seeking Partners to Achieve Ambitious Growth Plans

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Calling the Shots: Competition Is Bringing Increased Quality to the Sector As a crucial component of Kosovo’s infrastructure roll out, the telecommunications and IT sector has already seen unprecedented investment which is set to increase yet further. Internet and mobile penetration are growing rapidly in the nascent country with a highly qualified and youthful demographic providing both a receptive consumer base and a potential high skilled workforce for outsourcing operations. The telecommunications sector is home to the country’s largest company by capital and to some of the most prominent investments. The incumbent operator in Kosovo is the Post and Telecommunication Kosovo (PTK) which is responsible for Post of Kosovo, the fixed line operator, Telecoms of Kosovo, and the mobile operator, Vala. PTK, which is a public enterprise under the aegis of the Kosovo Trust Agency has 107,000 landline users and, through its subsidiary Vala, 830,000 mobile users. Furthermore, the company is Kosovo’s most profitable with an estimated value of approximately €1.3 billion. If more evidence were needed for the great strides forward that the country has made, one only need to look at the penetration levels in the telecommunications sector. Internet penetration in Kosovo had hit 15% by the final quarter of 2005 putting it on a par with Turkey and above more established regional players such as Romania and Albania. In 2007, this was given a further boost with the launch of PTK’s broadband package, ‘PTK ADSL’. The service had approximately 10,000 customers or a 25-30% market share by 2008 with Ipko Net and Kujtesa being the other market players. The country also had a mobile penetration rate of 35% in June 2007, a significant 42
KOSOVO Transport & Communications figure considering the brevity of the industry in Kosovo. Nevertheless, this provides extremely good potential for rapid growth. From a network point of view, PTK is already well placed to absorb this growth. Vala’s mobile network has been rolled out over approximately 90% of the country. The company also has 127 roaming agreements for post-paid customers showing its intent to expand its international network. On the fixed line segment, Ipko Net, the country’s largest internet provider has rolled out an extensive broadband network which has far-reaching population coverage. However, the country is not resting on its laurels. 2007 saw PTK’s monopoly of the mobile segment come to an end when Ipkonet Telekom Slovijne/Mobitel won the second operator mobile license for €75 million. The consortium announced their intention immediately with investment in its network which is expected to reach €120 million by the time roll out is complete. One of the first contracts for the GSM network went to Ericsson Nikola Tesla which won a €37 million contract for the supply, implementation and operation of the GSM communications and transmission system. While Ipkonet Telekom Slovijne/ Mobitel will initially concentrate on achieving coverage in Kosovo’s dense urban areas, labelled the Kosovo city ring, it expects to achieve full network coverage within three years. Indeed, the consortium has ambitious plans hoping to capture a 50% market share by 2012 and approximately 1 million GSM customers by 2015. However, competition is likely to be stiff with the state planning to privatise the incumbent operator Vala in the near future. Indeed, with a young, educated, technologically savvy population, penetration rates on both voice and data should shoot up over the coming years. This young work force, which has a competitive cost advantage over many neighbouring countries, will also allow Kosovo to position itself as an outsourcing hub following a model similar to the one so successfully employed by Bulgaria. Currently, public and private institutions in the field of information technology, supported by leading multinational firms such as CISCO and Microsoft, are being rolled out across the country supporting the development of a knowledge and high-tech economy. Initially, Kosovo is certainly well placed to develop the full spectrum of outsourcing operations including software development, data management, call and support centres and other consulting services. The government realises that to achieve these aims the regulatory and legal framework has to be in place. To this end, the Telecommunication Regulatory Authority (TRA) has been working on licensing, encouraging private sector participation and ensuring fair competition. While the country is still in the process of receiving recognition from the International Telecommunications Union (ITU) which will allow the country to register a telephone country code and internet domain name, much of the ground work has been done to provide fertile soil for further investment. Indeed, the telecommunications sector should provide unbounded opportunities for investment in the coming years. Indeed, once the country reaches market saturation on voice and data, the country should be in a good position to offer fixed-mobile convergence and bring the next generation of services to a hungry market. 43
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Kosova Airlines Seeking Partners to Achieve Ambitious Growth Plans

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