Govt. rejects new offer, Telekom sale falls through

@ Zoran.

Firstly, private business always does things better than government run business. always.

Telcom contributes about 50 mil/year.

The state of telcom infrastructure is pretty grim. There is no doubt that a foreign buyer will not only improve the infrastructure, but also the customer experience for Serbs.

The government is keeping a significant piece of the pie, so it will still generate some revenue.

The sale of telcom is not a bad thing; it's a good thing. Just the price was way too low.

Governments should establish policy, establish conditions for the people and for business to thrive. It's not the business of government to provide telephone calls to its citizens (or airline flights, or dig coal for, or you name it). Business always does business better than government.

I hope that is the last of it but somehow I don't think it will be. Telekom Srbija contributes a huge amount to the state budget and when it's sold and the money wasted, who will fill the hole? More loans I expect. The sell-outs are too predictable.

Danilo you are talking to Zoran, a guy who was raised in Australia and spent years in the UK, vcb who with his knowledge of the privatisation of water obviously has exposure to the UK and myself who also studied and spent years in the UK.

When can you get it into your head that the arguments that people use against pure capitalism are not through exposure to communism, but through exposure to capitalism?

I don't know if I can give you an example of a telecom monopoly being better than a private monopoly. I'd suppose that a private monopoly is even worse.

But I can tell you that British Telecom performed better before it was privatised. Many people will tell you the same thing about British Rail.

Danilo the problem with your argument is that private companies are unaccountable entities that serve their shareholders, company directors and customers in that order.

The state on the other hand is accountable to everybody. There is a sense that free marketeers suggest that the corporate world knows better what is good for mankind that mankind himself. That people shouldn't be trusted to make their own decisions via government mandate.

The bottom line you are correct on of course is that business can make a better profit for a company, its shareholders, directors and its customers. That generally means sacking workers, cancelling loss making projects / services etc that affects people's lives.

However, the bigger question of what kind of society we want is much too important to be left to corporations to decide our future for us.

A mixed economy is probably the least worst solution generally.

Danilo,

Unfortunately, Businesses are run as businesses, meaning for a profit, meaning that when you start privatising essential services, ordinary people lose out if they are not profitable. What private company will run a phone line up the side of a mountain to connect one lonely household, and how is a pensioner living on 150 euros a month going to pay the real cost of having a phone in the house? Businesses do better than Governments at making money but sometimes there are more important considerations than profit. Look at Health care in America, for example.

"What private company will run a phone line up the side of a mountain to connect one lonely household"

The one that's compelled to by regulation. Easier/more efficient to have a regulation and a regulatory body than to run the whole company. This is how it works everywhere in the world (successful countries, anyway)

"and how is a pensioner living on 150 euros a month going to pay the real cost of having a phone in the house."

Easier to subsidize the pensioner directly than to do that indirectly by running the whole phone company.

Danilo,

Pensioners are subsidized directly, it's called a pension and This State can barely afford to pay those every month, even with the revenue it receives from Telekom. And as for obliging private companies to maintain and invest profits in improving essential infrastructure by regulations, I have two words for you, Thames Water.

Danilo what do you mean by 'better off'?
And what do you mean by 'people'? It really is a general question you are asking, you must be specific.

By 'better off' you are talking about the profits for the telecom company being higher under private control? Is that correct?

By 'people' you are talking about shareholders, directors and customers in terms of advanced technology and cheaper calls, provided we are not talking about private monopoly which is even worse than state monopoly, yes?

In case I am correct I will answer the question. Arguably the majority of 'people' are not better off when the profits of the company are higher, although the directors, shareholders and customers of those companies might be (provided its not a monopoly). If its a state controlled company as you well know the profit is put into the government coffers and distributed among people benfiting all citizens of that country. Further, one can measure how much 'better off' people of a country are by how many of them which have jobs. You might think that sacking workers makes a country 'better off', but there is a huge social cost to pay in terms of increased gap between rich and poor, increased crime and more activity in the grey market.

Do you accept that there is a lot more to society than a profit margin?

Plenty of people around the world believe that there is? No lazy generalisations about the motives of work shy communists or worshippers of police state can change that fact.

You could at least respect the argument of those you disagree with.

I can't believe you guys are actually arguing in favour of a government monopoly. Some of you people have such silly ideas. You're so used to living under a police state of some variety that this police state exists in your head.

Give me one example in the world where a government telecom monopoly has been superior for the customers than a free market?

Please answer the question and provide one example of where people were better off with a government-run telecom monopoly

It's ok. you can't, because there isn't an example.

In every single market, when they opened, prices became cheaper to consumers.

Will that happen in Serbia? Probably not for local calls, but definitely international calling. It costs, what, 40 dinars/min to call the USA via Telecom? Guaranteed it's costing them less than 1/2 a dinar.

We're actually talking about two things happening here - the government selling their monopoly and market liberalization, which is starting to happen as well, with Orion entering the market.

I have to agree with Danilo. Governments have no business running businesses.

If a national government wants to ensure that old ladies up in the mountains are able to get a phone connection at a reasonable price, it is just a matter of writing it in as a condition in the license the phone company needs in order to be allowed to do business.

Same with public transport. Make it a condition that even rural towns and non-profitable areas are served adequately.

Combine those requirements and conditions with some heave fines if the private business does not keep to the agreement. And most importantly - MAKE DAMN SURE THAT YOU MONITOR THEIR COMPLIANCE!

I don't know what Thames Water is, or what the problem is/was with British Telecom, but let me guess: Some air-heads in the government, city council or whatever failed in their responsibility to 1) Create a contract without loopholes big enough to drive a truck through, or 2) Failed to follow through on monitoring the contract.

Neither is the failure of private business, but a failure of governance by our representatives.

I can't believe you guys are actually arguing in favour of a government monopoly. Some of you people have such silly ideas. You're so used to living under a police state of some variety that this police state exists in your head.

Give me one example in the world where a government telecom monopoly has been superior for the customers than a free market?

I hope that is the last of it but somehow I don't think it will be. Telekom Srbija contributes a huge amount to the state budget and when it's sold and the money wasted, who will fill the hole? More loans I expect. The sell-outs are too predictable.

"What private company will run a phone line up the side of a mountain to connect one lonely household"

The one that's compelled to by regulation. Easier/more efficient to have a regulation and a regulatory body than to run the whole company. This is how it works everywhere in the world (successful countries, anyway)

"and how is a pensioner living on 150 euros a month going to pay the real cost of having a phone in the house."

Easier to subsidize the pensioner directly than to do that indirectly by running the whole phone company.

Please answer the question and provide one example of where people were better off with a government-run telecom monopoly

It's ok. you can't, because there isn't an example.

In every single market, when they opened, prices became cheaper to consumers.

Will that happen in Serbia? Probably not for local calls, but definitely international calling. It costs, what, 40 dinars/min to call the USA via Telecom? Guaranteed it's costing them less than 1/2 a dinar.

We're actually talking about two things happening here - the government selling their monopoly and market liberalization, which is starting to happen as well, with Orion entering the market.

@ Zoran.

Firstly, private business always does things better than government run business. always.

Telcom contributes about 50 mil/year.

The state of telcom infrastructure is pretty grim. There is no doubt that a foreign buyer will not only improve the infrastructure, but also the customer experience for Serbs.

The government is keeping a significant piece of the pie, so it will still generate some revenue.

The sale of telcom is not a bad thing; it's a good thing. Just the price was way too low.

Governments should establish policy, establish conditions for the people and for business to thrive. It's not the business of government to provide telephone calls to its citizens (or airline flights, or dig coal for, or you name it). Business always does business better than government.

Danilo,

Unfortunately, Businesses are run as businesses, meaning for a profit, meaning that when you start privatising essential services, ordinary people lose out if they are not profitable. What private company will run a phone line up the side of a mountain to connect one lonely household, and how is a pensioner living on 150 euros a month going to pay the real cost of having a phone in the house? Businesses do better than Governments at making money but sometimes there are more important considerations than profit. Look at Health care in America, for example.

Danilo the problem with your argument is that private companies are unaccountable entities that serve their shareholders, company directors and customers in that order.

The state on the other hand is accountable to everybody. There is a sense that free marketeers suggest that the corporate world knows better what is good for mankind that mankind himself. That people shouldn't be trusted to make their own decisions via government mandate.

The bottom line you are correct on of course is that business can make a better profit for a company, its shareholders, directors and its customers. That generally means sacking workers, cancelling loss making projects / services etc that affects people's lives.

However, the bigger question of what kind of society we want is much too important to be left to corporations to decide our future for us.

A mixed economy is probably the least worst solution generally.

Danilo,

Pensioners are subsidized directly, it's called a pension and This State can barely afford to pay those every month, even with the revenue it receives from Telekom. And as for obliging private companies to maintain and invest profits in improving essential infrastructure by regulations, I have two words for you, Thames Water.

Danilo you are talking to Zoran, a guy who was raised in Australia and spent years in the UK, vcb who with his knowledge of the privatisation of water obviously has exposure to the UK and myself who also studied and spent years in the UK.

When can you get it into your head that the arguments that people use against pure capitalism are not through exposure to communism, but through exposure to capitalism?

I don't know if I can give you an example of a telecom monopoly being better than a private monopoly. I'd suppose that a private monopoly is even worse.

But I can tell you that British Telecom performed better before it was privatised. Many people will tell you the same thing about British Rail.

Danilo what do you mean by 'better off'?
And what do you mean by 'people'? It really is a general question you are asking, you must be specific.

By 'better off' you are talking about the profits for the telecom company being higher under private control? Is that correct?

By 'people' you are talking about shareholders, directors and customers in terms of advanced technology and cheaper calls, provided we are not talking about private monopoly which is even worse than state monopoly, yes?

In case I am correct I will answer the question. Arguably the majority of 'people' are not better off when the profits of the company are higher, although the directors, shareholders and customers of those companies might be (provided its not a monopoly). If its a state controlled company as you well know the profit is put into the government coffers and distributed among people benfiting all citizens of that country. Further, one can measure how much 'better off' people of a country are by how many of them which have jobs. You might think that sacking workers makes a country 'better off', but there is a huge social cost to pay in terms of increased gap between rich and poor, increased crime and more activity in the grey market.

Do you accept that there is a lot more to society than a profit margin?

Plenty of people around the world believe that there is? No lazy generalisations about the motives of work shy communists or worshippers of police state can change that fact.

You could at least respect the argument of those you disagree with.

I have to agree with Danilo. Governments have no business running businesses.

If a national government wants to ensure that old ladies up in the mountains are able to get a phone connection at a reasonable price, it is just a matter of writing it in as a condition in the license the phone company needs in order to be allowed to do business.

Same with public transport. Make it a condition that even rural towns and non-profitable areas are served adequately.

Combine those requirements and conditions with some heave fines if the private business does not keep to the agreement. And most importantly - MAKE DAMN SURE THAT YOU MONITOR THEIR COMPLIANCE!

I don't know what Thames Water is, or what the problem is/was with British Telecom, but let me guess: Some air-heads in the government, city council or whatever failed in their responsibility to 1) Create a contract without loopholes big enough to drive a truck through, or 2) Failed to follow through on monitoring the contract.

Neither is the failure of private business, but a failure of governance by our representatives.