Moving into media: Milutin Nikolic
09 May 2011 |
Milutin Nikolic discusses the liberalisation of Telekom Srbija and how multimedia is going to change telecoms.
We are looking forward to seeing the end of the liberalisation process and possibly becoming part of a bigger European company. If this happens, we can benefit from both economies of scale through purchasing assets and also by the transfer of knowledge from the more competitive markets.
The liberalisation means that more new players are going to enter the Serbian market but we believe we can cope with that. The competition is already noticeably strong in the region in terms of mobile, with companies like Telenor and Telekom Austria operating here. Among cable operators, we see different levels of competition. SBB is our biggest competitor, and Orion Telekom relies heavily on our infrastructure. Once you no longer need a licence to have fixed infrastructure, there will be big opportunities in the cable market and very big opportunities for the TV market.
At the moment, we bundle some services together but there are various regulatory restrictions to try and overcome. We have an approximate 99% market share in fixed line but the prices are still regulated by the government, so we are not allowed to make any changes to fixed network prices. We want to wait a little to bundle services properly, because while there is huge demand in internet and broadband, there is still big competition for a portion of the IPTV market. When we get a high level of market share in IPTV, I think we will go more aggressively into bundling services.
We expect to see broadband and IPTV penetration increase because, despite being in high demand, there is still room for growth. ADSL and fixed line is still being used but as the market shifts towards mobile broadband, that is where we see the greatest opportunity. We have just tested a 4G LTE network and so are beginning to move more into the mobile segment.
I think the future of Telekom Srbija will be to perform more like a media company rather than just a telco, but the cost of content is very high. We are trying to make deals directly with the content owners, and maybe even look to resell to some territories where we are not present. We are already looking at the content business and hope to do something more this year.
Over the next five years I expect to see ADSL grow as the number of computers per household increases. This provides a new base of customers and a lot of possibility and as a result we expect to see IPTV and broadband penetration rates grow over the period. We plan to do this while maintaining our revenue from mobile and fixed line.
Our biggest challenge is to see how we recover from the financial crisis. It had a great effect on residential customers because their purchasing power was severely reduced. As the country moves forward and starts to grow there are opportunities for us to grow as well.
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