Privatization of Albtelecom, new deadline for Calik Enerji

May 2007 is the new deadline set by the Albanian government for the Turkish company, Calik Enerji, to fulfill all regulative requirements in regard to the privatization of Albtelecom.

According to unidentified sources from the Albanian negotiating team, Calik Enerji needs to find a strategic partner, that is, another experienced company in the telecommunications market. And it needs to achieve this before the end of May 2007 in order to buy Albtelecom.

Calik Enerji presented a strategic partnership agreement with Turkish Telecom in the tender, however, now is not able to provide all documents verifying such an agreement. According to the Albanian law, the buyer of Albtelecom "should be a well known and experienced telecommunication’s company", and according to the Minister of Economy, Genc Ruli, Calik Enerji, does not fulfill this requirement.

Calik Enerji signed a contract in April 2005 to buy a 76% stake in Albtelecom for the established price of EUR 120mn; however, the contract will need an approval by the Albanian parliament before it can enter into force.

Albtelecom is of strategic importance for the east-west interconnection lines because it owns part of the telecommunication facilities connecting Italy with Turkey. All international calls are routed through Albtelecom, which in turn account for about 70% of the corporation’s total revenue. The fixed line operator also owns the third GSM license in the country, which has not yet become operative. The final buyer will enjoy access to a lucrative market of some 2 million customers and EUR 300 million in revenue.

Albanian government is currently under pressure from both parties about Albtelecom’s privatization. Meanwhile, the current mobile operators, AMC and Vodafone Albania, which share the mobile market in the country, are concerned over the fact that their new competitor will enjoy a free GSM license as well as the right to use their existing networks, if Albtelecom’s sale agreement terms stay as they are at the present.