State-owned Albtelecom is preparing for privatization by increasing its fixed line capacity and expanding the range of its mobile, internet and broadband services

Albania’s fixed line operator, Albtelecom, has been the key state-owned company slated for privatization in line with the Albanian government’s policy, in addition to the power utility company KESH.

Plans to sell the company were underway in 2005 when the former Socialist government signed a deal with the Turkish Calik Enerji Telekom consortium to sell 76 percent of the company for $120 million; however, when the new government came into office it did not recognize the agreement, saying it lacked transparency, competition and public discussion. Today, the government - instead of initiating a new tender - is renegotiating some of the contract’s terms, a process which is expected to take up to nine months. Privatization is expected to be completed by the end of 2007.

As the only fixed line telecommunications company, Albtelecom has a monopoly on the fixed line sector. The company posted a $10.9 million gross profit for the first half of 2006, due to network expansion and cutting costs, 46.3 percent above its original forecast.

In the first half of 2006, the company installed 10,261 new fixed lines, up 80 percent from the previous year and almost 30 percent over initial targets. At the end of the year the company had almost 250,000 subscribers. Also offering a host of services, including broadband and internet, Albtelecom saw its internet revenue rise by 219 percent year on year.

In terms of mobile carriers, Albania’s major operators include Albanian Mobile Communications and Vodafone Albania. Albtelecom recently launched its mobile arm, Eagle Mobile. Mobile telecommunications in Albania is at a greater density than in any other country in the region as it is quite effective and covers almost all the territory throughout the country.

Ilirian Kuka, the company’s General Director, says, “My priorities have been to change the image of the company and to introduce new products. We are working on improving the infrastructure and increasing capacities. In ten years I see Albtelecom as a very modern company in line with other big telecoms firms in Europe, and also a big player in the Balkans.”