Albania sells telecom for EUR 120mn

Albania sells telecom for EUR 120mn

The rest of the stock remains in the hands of Albania's Ministry of Economy. The price is the same as agreed upon in a 2005 version of the contract.

The agreement must be ratified in parliament, but it’s expected to be approved easily as it enjoys the backing of the current majority. 

The first contract between Calik Energy and the Albanian government was signed in 2005 by the Socialist government then in power. However the current parliamentary majority challenged the contract as unfavorable to Albanian taxpayers.

When the Democratic Party-led coalition won parliamentary elections in July 2005, they refused to ratify the agreement and forced the contract to be renegotiated.

One of the major points argued by the center-right government was that Calik Energy must include in its consortium an experienced telecom company.

Calik claimed in 2005 that it had an agreement with Turk Telecom, a subsidiary of Dubai-based Oger Telecom. However, the relationship between the two companies was not clear since neither the current or the former contract were made public.

A court challenge by the consumer interest group ZMQ to make the contract and documents related to the negotiations public under Albania's Freedom of Information Act is pending. A similar request has been voiced by the Socialist Party, which now is in opposition.

Finance Minister Gen Ruli, who led the Albanian negotiating team, said the new contract is more favorable than the one signed two years ago.

“I don’t think these two years were time lost in vain, because the new contract gives assurances to create a competitive environment in the communications market,” Ruli said during the ceremony where the contract was signed.

The telecom package acquired by the Turkish consortium includes a mobile telephony license, which is expected to increase competition and lower Albanian mobile tariffs that are now among the highest in Europe.

The sale of Albtelekom provides a much needed revenue boost for the Albanian government. The country slashed most of its customs tariffs after initialing its Stabilization and Association Agreement (SAA) with the European Union.

The president of Calik Group, which holds 80 percent of the shares of the Turkish consortium, said the privatized company will make major investments.

“We are planning to hold major investments in technology in the company to improve customer satisfaction and services,” Ahmet Calik said.