Slovak Telecom for sale - again

State-owned Slovak Telecom (ST), the country's fixed telephony monopoly, is being hoisted onto the auction block once again. Gabriel Palacka, the Minister of Transport, Post and Telecomunication, told a press conference on November 12 that ST would be turned into joint-stock company within six months.
Palacka said that ST, as a state company, had reached the limit of its development potential, and henceforth would be actively seeking capital investment from a foreign telecom operator.
"In all probability it will be necessary to allow the entry of foreign capital, know-how and technology to advance Slovak Telecom to a higher level and to keep up the pace of development," Palacka said.

State-owned Slovak Telecom (ST), the country's fixed telephony monopoly, is being hoisted onto the auction block once again. Gabriel Palacka, the Minister of Transport, Post and Telecomunication, told a press conference on November 12 that ST would be turned into joint-stock company within six months.

Palacka said that ST, as a state company, had reached the limit of its development potential, and henceforth would be actively seeking capital investment from a foreign telecom operator.

"In all probability it will be necessary to allow the entry of foreign capital, know-how and technology to advance Slovak Telecom to a higher level and to keep up the pace of development," Palacka said.

The minister's announcement produced little excitement in the business community, however. ST's privatisation has been mooted many times since the 1995 Telecommunication Policy Document was approved by the then-goverment of Vladimír Mečiar. The document had set down rules for the transformation of ST into a joint stock company, but as Palacka explained, "unfortunately this plan was never carried out."

According to Juraj Renčko, an economic forecaster at the Slovak Academy of Sciences, a dogfight among domestic business interests for the rights to ST had effectively prevented its sale. "A lot of powerful business groups existed which wanted to invest into Slovak Telecom, and that's why the process of transformation wasn't realized," Renčko said.

Renčko did say, however, that investors might finally be rewarded for their patience. "Potential investors see a real willingness in the new government to begin the process of transformation," he said.

But Peter Haluš, the director of the Telecommunications Section at the Ministry, would not commit himself. Having several times in the past announced publicly that ST was on the verge of transition, he reserved judgement on the latest announcement. "We will wait for the government's decision," Haluš said.

ST is one of the only fully state-owned telecom companies with a strong monopolistic position remaining on the market in central Europe.

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