Today, Telekom Srbija is the largest telecommunications company in Serbia, with revenue of €1.2 billion in 2021. Yet it has not stayed still. In recent years, the company has been making moves to go in new directions, helping it keep up with the times and ensure it solidifies its market standing.
Founded in 1997, the group’s operations also stretch across six other countries – Bosnia-Herzegovina, Montenegro and North Macedonia, as well as, more recently, Switzerland, Austria and Germany.
But in its home country, the fixed market was highly fragmented not long ago, with more than 50 minor cable operators prior to 2018. However, Telekom Srbija acquired more than 20 of the largest operators, cementing its leading market position.
Telekom Srbija was also recently announced as its home country’s best mobile network for the third year running by the Regulatory Agency for Electronic Communications and Postal Services, based on the quality of its mobile network.
The company’s CEO, Vladimir Lučić, says that the operator’s strategy is a “little different” compared with bigger industry peers – sitting somewhere between that of a telco and a player like Amazon, being also recognised as a noteworthy media company. Telekom Srbija, on top of being the national leader for fixed, mobile and fixed broadband categories, also provides sports, movie and music channels.
Future directions
In the future, Lučić envisages that all revenue will stem from internet connectivity – “so we have to be prepared for that future”, he says. Telekom Srbija therefore has a two-pronged approach: one is building a powerful fibre-optic infrastructure to become the leading provider of fixed and mobile internet; the second is finding new revenue streams, with the aim of being “the main producer of content in this region”, says Lučić.
And providing this new content will result in an even more important opportunity – digital services, which Lučić thinks have opened up an exciting new opportunity. “A mistake of telco companies of the past is that they had really big revenue from standard services, so they didn't realise the importance of looking towards the future.”
Enter the Corporate Venture Capital (CVC) fund, which was founded by Telekom Srbija and aims to invest €25 million over the next five years to nurture start-ups across the region.
“This region is essentially already recognised as having good potential,” says Lučić, adding that there are some promising ideas across industries ranging from artificial intelligence to healthcare and IoT.
This will also go some way towards giving Telekom Srbija an edge in the market, he believes. “Our idea is to start to develop a range of digital services through this online venture capital fund – so this is part of our strategy to be more innovative and proactive when generating new revenue.”
But just as importantly, the CVC is aimed at helping young people to realise their potential and solidifying the region as a hotbed of innovation.
Funding for change
Another leap forward came for Telekom Srbija last December, when the European Investment Bank (EIB) announced that it would lend €70 million to the company to install 5G – helping bring the technology to 60% of the population – and expand its 4G offering.
Lučić highlights that this is an important relationship that will contribute to the digital transformation of all sectors and thus help boost the economy, while providing Serbia’s population with faster and easier internet access to aid the development of society as a whole.
Another important relationship for Telekom Srbija was announced in November last year – a strategic partnership with Vodafone covering Serbia, Montenegro and Bosnia-Herzegovina. This will help the company realise its 5G goal, though the benefits of the partnership don’t stop there. “A big part of this is procurement. We’re a small telco operator and Vodafone is one of the biggest operators in the world, so we’ll be able to lower capex and investment costs,” says Lučić.
Despite the challenges of the past two years, the company has continued to adapt. Telekom Srbija is now also looking for ways to realise its vision for the future of telecoms and, at the same time, work towards bringing its services to new markets – thereby growing the presence of south-eastern Europe as part of the bigger picture. As Lučić succinctly puts it: “The idea is to be the local leader but also a global player.”
