VLADIMIR LUČIĆ FOR KURIR: 'We've righted a wrong of 20 years and PUT TELEKOM TO NO 1 IN SERBIA!'

'This year marked the finish of our triumph in the market, because now we have one million potential optical connections, and the user numbers are naturally on the uptick. We've put all the cable operators together into Telekom, and now we're are a single legal entity,' Telekom Serbia's CEO says

"We've had an exceptionally successful year, I think the most successful in Telekom's history, due to the fact that Telekom has managed to complete all the projects it started in this transformation. The most important item of news this year has been that in the Serbian market, Telekom is ranking at number one in all its lines of business, righting a wrong of 20 years. Instead of having Telekom start out first, as a state-run operator, with competitors following suit, we were in a situation where it wasn't until 2021 that we'd managed to be number one in the market across four telecommunications services – internet and cable provision, and mobile and fixed telephony. More importantly, the trend indicates that Telekom is leaving competition further and further behind. This year marked the finish of our triumph in the market, because now we have one million potential optical connections, and the user numbers are naturally on the uptick. We've put all the cable operators together into Telekom, and now we're are a single legal entity. The most recent triumph, related to the Premier League as a key source of sports content, has allowed us to leave behind poor-quality content and reach a point where we practically have the entire sports spectrum. Because United Group had been building the image of its Sport Klub using that very football league, which it had for 12 years. The focus wasn't just on Arena, Superstar, or Euronews – we've also managed to enrich our offer through various partnerships and to triumph by means of our content. We have also made two great strategic moves – we have signed agreements with Vodafone and the European Investment Bank. Taken together, the stats suggest that Telekom Serbia has increased its user base by as many as 600,000 users in Serbia alone. We've gone from 426,000 to 1,027,000 users."

Do these numbers come with a rise in revenue?

"As regards our revenues and the move to put all the cable operators together into Telekom Serbia, it's clear that Telekom's revenues have been on the rise since 2018. However, now that we've combined everything into a single company, we've had RSD 109bn, and in 2022 we will have RSD 129bn. So, Telekom Serbia alone has a billion euros in revenues, which wasn't the case at the best of times, when we were more profitable than even the Petroleum Industry of Serbia. Next year we're returning to being number one most profitable company – not only in the telecommunications industry, but across the board. We've completed the consolidation of everything that we started out to do, so it's a good thing that now our future is certain and that the user numbers will continue to rise. From the mid-2022, when we take over the Premier League, we are bound to grab an additional 20 percent."

You have reason enough to draw up even more ambitious plans for next year. What can you reveal to us?

"Our main focus will be to use what we've invested in and built. We're now in a favourable situation, as we have invested, and now these investments will bear fruit. Owing to taking over the Premier League and building a very strong optical network – with over a million potential users and 250,000 current users – we have created more space for new users. As for Serbia, we will be focusing on widening our internet and television user base. Such user numbers mean potential future growth of revenues. This is why this segment actually pushes up the value of the company. The plan is to increase the number of mobile users, as we are the highest-quality network for the third time running and the only ones with the right combination of the internet, television, and mobile telephony. We expect to get a significant increase in user numbers there in Serbia. We're launching mobile telephony in North Macedonia in April and expect significant growth there as well. Next year, we will launch operators in Germany and Switzerland, similar to the situation in Austria, with the aim of getting as many television and internet users there as possible, and selling there the content that we're investing in as well. In fact, we're actually seeking out our linguistic area, where we can sell more easily what we have invested into."

Speaking of global competition, can television series break into markets outside Serbia and the region?

"There's no doubt that we can get into the global market with our TV series productions. We're already selling a number of TV series to countries around the world, and I think we'll be taking it to a higher level. Our TV series have universal themes and can be easily understood outside our own borders. That's the tack that we'll pursuing. Our production equals the HBO production, for example. That's why I'm optimistic that the Serbian productions will be recognized around the world again. We won't only be active in TV series productions – I think we'll be the trigger of internationalization. As production leaders, now we're investing in a highly developed sales network, where we would first have contracts with a number of television channels in over 100 countries. Secondly, we need to sign agreements with Netflix and HBO. "The Civil Servant" (Državni Službenik) was sold to the biggest Brazilian platform. This TV series was subtitled in Spanish, and now they want it dubbed in Spanish, as they plan to sell it to the entire South America and even to the Spanish-speaking parts of the US. So, all this requires continual work and an ability to adapt to different demands of the buyers."

This about-face by Telekom did not happen overnight. How painful was the transformation?

"The starting positions of the other European telecom operators was far more favourable than that of Telekom Serbia, as all of them had always been in an undisputed number one spot in their respective countries. In terms of fixed internet and television, Telekom was at a stage where it didn't have a large share. The television service was practically below 20 percent, and in the big cities – Belgrade, Novi Sad, Kragujevac, and Niš – it was less than one percent. The internet service stood at a mere nine percent and, to make matters worse, faced a downward trend. The fixed internet and fixed television numbers were taking a plunge. It was clear that the situation we were in meant that the number of television users we had corresponded to the number of internet and fixed users we had, and that we were practically disappearing. The fact that we had a good market share in mobile telephony notwithstanding, this segment isn't as profitable as it was ten years ago, when the social media weren't as dominant as they are today."

And what was the situation like among the cable operators?

"2018 was a bad year for Telekom for these reasons as well. The cable operators had organized themselves well. You had SBB as the leader of the cartel and other cable operators in smaller cities. They didn't go against one another. Whoever has lived and worked in Serbia in the past 20 years could have noticed that it was quite rare to have a building with two cable operators. It was a system where they never attacked each other – all they did was pounce at Telekom, while SBB had exclusive channels like Sport Klub, Grand, the Fox Channel, etc. SBB would also occasionally purchase a cable operator. All in all, it was a system that Telekom could not stand up against."

However, stand up it did and has won. How?

"What was necessary was four great investment cycles at Telekom. First, endeavour to consolidate the market so that we could reach the number one spot in internet and television as soon as possible. In other words, to reduce the number of competitors by means of acquisitions – and we did that fast. Second, building an optical network. Unfortunately, Telekom Serbia had been lagging behind in that area as well. Third, remove our competitors' advantage in terms of content. For example, as early as 2019, we solved the problem of Fox, whose content we hadn't been able to have until then. This helped create more channels, to further improve our content. We were on the defensive then, so, compared to Sport Klub, Arena didn't have either the Premier League or the Spanish League. Furthermore, in 2017 Sport Klub took over the national team matches at the European Championship. Fourth, according to the RATEL reports, in 2017 and 2018 we were a considerably lower-quality mobile network than either VIP or Telenor, so we had to make additional investments in that segment as well to get to number one."

How do you explain the fact that Telekom has never been more successful and, at the same time, more denounced? What is behind all this?

"If you pay attention to what the analysts and politicians financed by the competitors criticise us for, you can see that they don't slam us over whether what we've done is or isn't good in business terms – they most often bring up debt. In order to go into these investment cycles, it makes perfect sense to take out investment loans from renowned European banks. I find the attacks launched by United Group easy to understand. They can be understood by anyone who wishes to see things in a non-biased sort of way. If you consider when the attacks are launched and what gets criticised, you'll see that all of them, organized and funded by the owner of United Group, have a single aim. What came first was the media tabloid attacks, against me in particular. When that failed, they added political parties in the mix. When that failed too, this past year they've even gone international, paying all kinds of lobbying firms, legal practices, and international detective agencies. So, these lobbying firms tried to knock together some reports and send them to Brussels and Washington, dragging a state-run enterprise through the mud. And all that so that they could retain their dominant position in the market. With us expanding, they lose not only profits, but the media and political influence as well, which they have tried to save with all their might. If it were just profit, then you could ask why anyone would mind cable operator acquisitions and market consolidation. They saw it as their prey – us disappearing and they having different sorts of influences through their channels."

One of the regular topics for United Group and its mouthpieces is the alleged over-indebtedness of Telekom. Could you once and for all explain to us what it is all about, and how it is possible that you have incurred such a level of debt, as Marinika Tepić keeps claiming, and yet gained the trust of the European Investment Bank?

"However much money has gone into it – and according to our information, they've been investing millions of euros in lobbying groups – the truth does prevail eventually. You cannot take in such big financial institutions as the EIB, which had been making assessments for one year prior to signing an agreement with us; or Vodafone, which is the fifth largest UK company and the biggest telecommunications operator in Europe. Whatever Telekom-related conspiracy theory their lobbyists come up with, it's very easy to explain what we have invested funds in. The sports rights were more expensive, but that made sense given that you had two competitors – Arena and Sport Klub. The point is that we made good in business terms, and that our investments further strengthen the trust of the financial institutions. The EIB agreement is the first agreement made by this bank with a telecommunications operator from the Western Balkans. In the first six months of the coming year, we will demonstrate our financial power. Most of the loans that we get – mainly from Western European banks – have been approved without guarantees, which speaks to the trust in Telekom. The paradox lies in the fact that the story of Telekom being over-indebted is being spun though its media by our competitor, which happens to have three times the debt that we have. United Group owes app. 3.6 billion euros and is a persistent lossmaker. Its total accumulated losses stand at 640 million euros, which doesn't prevent it from incurring even more debt. They pass this off as sound business policy while denigrating us for what are supposedly disastrous business operations, even though we have made sure our debt is such that no one asks for a guarantee – unlike them, who offer their companies as a guarantee for their debts. In other words, they have a similar strategy with much worse results."

Marinika Tepić is alleging that Telekom's results have been doctored. Is something like that even possible in the business world of the 21^st century?

"All our financial results are public and are regularly discussed for several months. Second, when financial institutions give you a loan, they check every figure in detail. Given that we get multi-year loans without guarantees, this indicates that the trust in Telekom is on the rise. On the other hand, our competitor has set itself two tasks. One is to disconcert the financial institutions, and the other is to try and convince our international partners to cancel the agreements that we have made with them. But, repeating the lies about Telekom on competitor television channels will not convince anyone of what isn't true. That especially holds for no-nonsense financial institutions. When the 2021 financial results are published, our citizens will be pleasantly surprised to see how much our revenues and profits rise. Serious European banks are vying to work with us, we have truly fascinating offers to pay off and refinance Telekom's debts without any guarantees on our part. This is precisely the reason why the attacks of our competitors don't bother us all that much. They've been saying we're over-indebted since 2019, and with every new year we prove them wrong. In addition to banks, our foreign partners – who we've been buying broadcast rights from – haven't asked for guarantees either. The one exception is the UEFA, for which guarantees are a condition for participating in the tender process."

Ivana Kljajić/ Kurir.rs