Swan squeezes onto Slovakia's mobile market

By bne IntelliNews October 5, 2015

Carmen Simion -

Slovakia's state-owned postal service provider Slovenska Posta and telecommunication company Swan have joined up and rolled out full services at the country’s fourth mobile phone operator, 4KA, on October 5. It will be a squeeze for the company to push into a busy sector.

Swan, which obtained its 4G network frequencies for €6.6mn last year, is eyeing benefits from Slovenska Posta’s large distribution network. 4KA - or "Shtvorka" - will sell pre-paid services in around 1,500 post offices eventually.

At the same time, the Slovak postal services provider will diversify its product portfolio and gain more revenue. Described in some media as "closely-held," Swan has been offering data services for a couple of months.

Lacking its own full network, 4KA provides national roaming services using the network of competitior Slovak Telekom, which is owned by Deutsche Telekom. The new operator can currently offer services to 40% of the population in more than 60 towns. It is busy expanding coverage, TASR news agency reports.

"In cooperation with the Slovak Post Office, we've created a human and effective mobile operator that's coming on the market with a uniquely easy concept of a flat price, removal of borders within the EU, and its own 4G network of the latest generation with nationwide signal coverage," Swan general director Miroslav Strecansky said. "It's all for good prices for everyone without being bound for a contracted period." 

Slovenska Posta had earlier expressed its determination to enter the mobile phone business. It said that if cooperation with Swan had failed it would have turned to the other three mobile phone operators in Slovakia.

Local media suggest that the importance of launching the new operator before the Christmas season is crucial. The end of the year sees many contracts expiring. The new mobile phone operator will compete with Orange - owned by France's Orange, and Telefonica - owned by Czech investment group PPF, suggesting it will need to fight hard in a market with a population of just 5mn.

"Slovakia is an extremely small market. If you look at bigger countries, like Austria for example, the entrance of a fourth operator led to price wars," Raiffeisen Centrobank analyst Jakub Krawczyk tells bne IntelliNews. "It will be very interesting to see if it really works in Slovakia,” he adds, noting Telefonica has boosted price competition in the market.

Following some years of apparent lack of interest, Deutsche Telekom bought the Slovak state out of its 49% stake in Slovak Telekom in May. The sudden €900mn deal saw a planned IPO of the stake scrapped. Bratislava looks likely to use the cash to buy a majority stake in dominant power generator Slovenske Elektrarne.

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