From the beginning of May, 1997 until the third week in July, Globtel had an offer whereby customers could bring in two privatization bonds, worth approximately 7,500 Sk each, and exchange them for a mobile phone, and a GSM activation-free minutes package worth 5,000 Sk.
The handset offered at first was the Philips FIZZ (retail price 8,241 Sk including tax), and later the Sagem 410L (8,609 Sk). Globtel sold off the bonds through a broker for an undisclosed amount, giving people who were anxious to get rid of their bonds a convenient outlet for them.
The trade-off was a success until the bonds' value took a sharp tumble in July after the FNM released what companies the bonds could be used for on the capital market. These companies - some in liquidation and others close to bankruptcy - inspired few citizens, causing bond values to plummet. Globtel cancelled its deal soon thereafter.
But, for two and a half months, Globtel was getting 15,000 Sk worth of bonds in exchange for 13,241 Sk of merchandise, while more than 500 people per week were getting a mobile phone and GSM hook-up for money long ago spent and since written off. From Globtel's perspective, a sale had been held de facto, but not in violation of Slovakia's subsidy law which only allows two sales per year by GSM companies. "The bond exchange scheme was helpful for citizens to overcome the financial barrier," said Globtel PR Manager Andrea Boldocká.
14. Aug 1997 at 0:00 | Tom Nicholson