Telenor wins auction for Serbia's biggest mobile firm
The Telenor Group saw off competition from Mobilkom Austria and Orascom Telecom of Egypt in the auction, which was televised live on state-run RTS television, for a 70-percent stake in Mobi 63.
With the winning bid, Telenor also secured a renewable 10-year operating licence to run Mobi 63, the company formerly named Mobtel which has an estimated two million subscribers.
"We are naturally excited at expanding our footprint and adding this new company to the Telenor Group," the Norwegian company's president and chief executive, Jon Frederik Baksaas, said in a statement received on Monday.
"Serbia has long been an interesting market for us. Telenor first entered the Balkan region more than 10 years ago and we currently have mobile operations in a number of neighbouring countries," said Baksaas.
"The acquisition of Mobi 63 will allow us to further our aim of creating a strong Telenor operational hub in this prioritised geographic area with long-term synergies across the companies," he added.
Telenor, Mobilkom and Orascom won the right to bid for Mobi 63 last week after the Serbian government eliminated seven other companies including France Telecom and Deutsche Telekom, as well as firms from Abu Dhabi, Israel, Russia and two from Sweden.
The bidding on Monday began at 1.373 billion euros, which was the starting price based on Telenor's pre-auction offer. The amount prompted Orascom to immediately withdraw from the rest of the auction.
The Norwegian and Austrian companies continued to take part in the auction, and both remained in the bidding until it surpassed the sum of 1.513 billion euros, with both of them turning down the next offer of 1.533 billion euros.
The winning bid was then reverted to Telenor because the company had made the largest initial offer before the start of the auction.
The 1.513 billion-euro price-tag is one of the biggest sums paid for a Serbian company in a privatisation.
Mobi 63 was set up in 1994 by Bogoljub Karic, a tycoon who amassed his fortune during the era of late former Yugoslav leader Slobodan Milosevic.
But the Serbian government revoked its licence in December, citing allegedly illegal deals in the UN-run Serbian province of Kosovo. The company had since been run by the state operator Telekom Srbija.
The Austrian investment group Holdenhurst, which owns the remaining 30-percent stake in Mobi 63, could also sell its share.
Telenor -- with ownership interests in 12 mobile operators across Asia and Europe, including Hungary and Montenegro -- had 82.7 million subscribers at year-end 2005, according to the company's website.