Huawei plans investment in Telekom Srbija, Chinese official says

Huawei plans investment in Telekom Srbija, Chinese official says
By bne IntelliNews September 27, 2016

The next large Chinese investment in Serbia will likely be Huawei’s in state-owned telecoms giant Telekom Srbija, the Chinese ambassador to Serbia Li Manchang told Tanjug on September 26.

It is not clear what the deal between the two companies will involve, and neither has so far commented on the planned investment. Telekom Srbija was put up for privatisation in 2015 but the sale attempt flopped and the government has said it does not plan a new privatisation round before 2020. 

“The deal with [Serbian steel mill] Zelezara [Smederevo] has been realised, the second one is the deal which will be reached between Telekom Srbija and Huawei, likely in October, I think,” Manchang said on September 26 at a ceremony in Belgrade marking the 67th anniversary of the establishment of the Chinese People’s Republic.

The ambassador did not provide any further details about the expected deal, so it is not known whether Huawei is in talks about taking a stake in the Serbian telco or possibly launching a joint venture. 

Shenzhen-based Huawai is the world's largest telecoms equipment manufacturer, and also builds telecoms networks and provides services to telecoms companies. 

Belgrade has been keen to attract Chinese companies to Serbia to invest in industrial production and boost employment. China’s Hebei Iron and Steel Group (HBIS) acquired Zelezara Smederevo, Serbia’s only steel mill earlier this year. China and Serbia also signed 22 bilateral agreements on June 18 during Chinese President Xi Jinping’s three-day visit to Belgrade. Among these agreements was a deal aimed at improving cooperation in the IT sector. 

The Serbian government decided in July 2015 to privatise its 58.11% stake in Telekom Srbija, aiming to accelerate its development, increase competitiveness and avoid a state-led restructuring. However, in December officials decided not to sell the stake because the best price offered - by an unnamed US investment fund - was unsatisfactory. 

Huawei was not reported to be among the firms interested in purchasing Telekom Srbija, although major Chinese state-owned telecoms corporation China Telekom was, alongside US investment fund Colbeck Capital Management, and Apollo in partnership with Telekom Slovenije, the Slovenian incumbent whose privatisation also failed in 2015.

The main players in the telecommunications market in Serbia include, besides Telekom Srbija, the local arm of Norway's Telenor and the Serbian arm of Telekom Austria, Vip Mobile.

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