Associated Pres: Montenegro to Sell Its Stake in Telecom

Montenegro's government announced Friday it will sell its 51 percent stake in Telecom, the tiny republic's telephone, cell phone and Internet provider.

Its overall value is estimated at around euro150 million (US$187 million). Telecom's reported earnings for 2003 were euro18 million (US$22.5 million), and in the first quarter of this year, earnings were euro14.5 million (US$18.1 million), government official Branko Vujovic said.

An official offer, complete with terms and conditions for possible buyers, will be published on Monday, Vujovic said.

The remaining 49 percent of Telecom was privatized in 2001 through a government-organized voucher program. Typically used by former communist countries, the method allowed thousands of individual citizens to acquire small stakes in the former state monopoly.

Considered one of a few larger profitable companies in the cash-strapped Balkan republic, Telecom operates 191,000 land lines and has 225,000 cell phone users. It also operates several hundred public pay phones in Montenegro and provides Internet services.

Telecom's current work force is 1,200.

Its main competitor in the relatively developed mobile phone sector here is ProMonte, which has 366,000 cell phone users and is entirely owned by Telenor of Norway.

The Montenegrin government said the sale should be completed later this year, and that the cash from the sale mostly will be used for rebuilding and modernizing roads in central and northern Montenegro.

Some in the coalition government of Prime Minister Milo Djukanovic have questioned the sale. The Social Democrats, a small party in the coalition, protested the decision, calling it "a panic move to sell a good company" merely to cover a budget deficit.