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The Government of the Republic of Serbia

In the service of citizens

Telecommunications market to be liberalised

Belgrade, 16 October 2007

Serbian Minister of Telecommunications and Information Society Aleksandra Smiljanic said today that the drafting of a law on telecommunications is underway and explained that the bill will be harmonised with EU Directives and will provide liberalisation of the telecommunications market.

Speaking at the Economic Summit Serbia 2007, Smiljanic announced a set of laws regulating this area and added that the development of e-government will be among priority tasks.

She explained that connecting with the ministries and most important public services online would speed up communication as well as completion of affairs.

The Ministry of Telecommunications and Information Society is currently implementing programmes of fiscal decentralisation, which will provide e-network for tax authorities at local level and their connection with the state tax administration, Smiljanic said and added that e-registry of citizens and public procurements is being made.

Smiljanic listed among priorities work on law on e-commerce and e-signature and announced that authorised bodies for granting certificates on e-signatures will be established next year.

She noted that the small number of internet users is a big problem and noted that introduction of broadband internet connection is necessary for business.

According to her, nearly 100,000 people in Serbia have broadband internet access, and Telekom Srbija is the only authorised distributor.

Smiljanic said that in 2006 revenues from telecommunications amounted to nearly €1.3 billion, or 40% more than in 2005, half of which was collected from mobile phone services, 34.7% from land line services, while the rest was generated by cable TV and internet services. Serbian Minister of Energy and Mining Aleksandar Popovic spoke of Serbia’s energy prospects and the initiation of large projects, noting that Serbia needs a strategic partner for construction of underground gas storage in Banatski Dvor.

He noted that Serbia needs to participate in the pan-European gas pipeline from Constanta to Trieste. Popovic said that the EU should organise an investment conference in November to collect funds for the gas pipeline.

Speaking on the electricity shortage, Popovic said that this is the problem in wintertime not only in Serbia but in the whole region.

He stated that it is necessary to build new large capacities for production of electricity and recalled that cooperation of EPS and a strategic partner should complete 700 megawatt "Kolubara B" thermal plant whose value is nearly €750 million.

At the same time, a new 700 megawatt part of "Nikola Tesla B" thermal plant will be announced, the minister said and added that the value of this project is around €900 million. Oil company NIS will be privatised by sale of part of its property, Popovic said and added that the privatisation of NIS will be executed in a transparent and legal way.

Director of the Privatisation Agency Vesna Dzinic announced that 22 companies will be offered in a tender by the end of the year while nearly 150 will be auctioned.

She said that privatisation of socially-owned capital will be completed at the end of 2008 and said there are 77 large socially-owned companies awaiting privatisation in a tender.

Another 1,100 companies are yet to be offered at auction sale, 850 of which are socially-owned while 250 are state-owned, she said and said that revenues from privatisation of 98 companies by September this year generated revenues of nearly €1.1 billion.

A total of 1,700 companies were privatised through auction sale, which generated around €1 billion, she said and noted that over 1,000 packages of shares have been sold from the Share Fund on the Belgrade Stock Exchange.