Telekom Srbija CEO Q&A

By Telekom Srbija

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this Q&A Vladimir Lučić, Chief Executive Officer of Telekom Srbija, discusses their plan for 2022.

Please tell us a few words about Telekom Srbija and its vision and mission?

Telekom Srbija is Serbia’s largest telecommunications and multimedia provider and a market leader in South-East Europe with strong growth potential. Today the business is proud to provide content in Serbia, Bosnia and Herzegovina, Montenegro and North Macedonia under the MTS and mtel brands. Also, in the last five years we are present in the Austrian market as a telco operator with impressive business results as well. This was a trigger for us to start further growth in the markets of Germany and Switzerland, where we are at the final stage and soon we will open 30 shops. As a joint stock company, Telekom Srbija operates under a two-tier system with a Corporate Governance Code in accordance with EU best industry practice and OECD principles.

We are a thriving business that has created value for its customers, the country, its shareholders and its employees. Prior to 2018, the fixed market in Serbia was highly fragmented with more than 50 minor cable operators. Telekom Srbija has made a huge step forward by acquiring more than 20 of the largest cable operators, thereby consolidating and maintaining a leading market position. Over the past five years, Telekom Srbija has substantially evolved by digitalising its services and establishing itself as the leading exclusive content provider in the region. As a business, we strive for industry best practice in everything we do.

Our guiding vision is to be a trusted global partner in the new digital era. As part of our dynamic, customer driven mission, we are transforming and continuously advancing customer satisfaction through a triptych of customer centricity, innovation, and passion for excellence. At the same time, we remain resolute in our commitment to be a positive force for the country creating socio-economic opportunity through sustainable growth. Our future, as a business, is inextricably linked with the digital future of Serbia. To that end, we are focusing our efforts on accelerating the digital transformation of the Serbian economy and society in line with the national digitalisation priorities outlined in the Serbian Digital Agenda.

What is Telekom Srbija’s strategic plan for 2022?

In 2022, Telekom Srbija is committed to continue to expand market share in a fast-growing market and to demonstrate its strong financial track record.

We are one of the largest telco operators in South Eastern Europe with almost Euros 1.2bn in revenue and a compound annual growth rate of 5% since 2018.  Our EBITDA margin has also grown by 13% over this time and stands at 38%. Our subscriber base continues to grow year on year and now exceeds almost 11 million subscribers inside and outside Serbia.

Investing in world-class talent

As a pioneer for innovation and digital transformation across the Balkans, the company has demonstrated consistent growth over the last five years. Our strength relies on putting the customer first and building talent within our organisation. With this in mind we will continue to invest in our people. We are seeking high-calibre candidates for a new Global Investor Relations role based out of the company’s headquarters in Belgrade. The appointed professional will be responsible for establishing and developing Telekom Serbia’s investor relations departments according to world-class standards and best practices.

Multi-sector investment

Telekom Srbija established its first Corporate Venture Capital Fund for start-up ideas in 2021, aiming to invest EUR 25 million over the next five years, which means that Telekom Srbija will invest five million euros per year for start-ups in Serbia and region. In 2022 Telekom Srbija through its CVC Fund will continue to invest heavily in multiple fields of business such as AI, Big Data, FinTech, e-commerce, IoT, media and telco, AdTech, B2B/B2C, SaaS and blockchain.

5G rollout

Recently, on 15 December 2021, the European Investment Bank (EIB) announced that it will lend EUR 70 million to Telekom Srbija for the rollout of the 5G telecommunications network and extension of the existing 4G network across the Republic of Serbia, recognising us as a key market leader in the region. The EIB loan will enable 60% of Serbian residents to gain access to the latest 5G network and extend the benefits of the 4G network to nearly everyone in the country.

Partnership with Vodafone

Additionally this year, our collaboration with Vodafone, covering Serbia, Montenegro and Bosnia and Herzegovina, will provide us with access to all important resources in the sphere of digital transformation. This will make it possible for us to increase the efficiency of our operations, optimise costs and improve customer experience in the coming year. All of which are key strategic priorities for Telekom Srbija.

Digitalisation

For 2022, we see digital opportunities as a significant part of a more sustainable future of the Serbian economy and society. A 5G spectrum auction is expected in mid-2022, to be followed by the implementation of the 5G Network in Telekom Srbija by the end of year.

How has the pandemic changed the telecoms industry and how has Telekom Srbija responded to the challenges it has brought?

Every economic sector and every business within each sector has been impacted by the COVID-19 pandemic, which has caused a global reset in general in how we live work and play. The reliability of Europe’s telecommunications infrastructure has been tested and proven during the pandemic, while it provided a resilient and secure platform for human connection and business continuity during national lockdowns across the globe. COVID-19 accelerated the adoption of new technologies in the Serbian government. One example is the Immunization Management System that was developed in record time as vaccines were in final trial phases. With regard to our sector, the pandemic has stimulated consumer take up of services, particularly mobile data.

The pandemic has also shown us all how intertwined technology and education have become. The telecom industry globally has an ethical responsibility to get more children online. Our organization, Telekom Srbija, has developed specific education-focused actions and initiatives that aim to underpin the success of future generations.

For instance, in Serbia, since September 2020, all first-grade children are being put through a program called “Digital World.” Our contribution is helping teachers to deliver lessons that sensitize children to fact-check online content, understand news media, make informed choices and resist peer pressure.

Via the “Digital Serbia” initiative we donated handsets and SIM cards to eighth grade students as well as 5GB of data per month to students from vulnerable families. We also facilitated distance learning by providing free access to official internet platforms necessary for receiving information.

More broadly and in an effort to make it easier for citizens to spend the lockdown at home, we unlocked a large number of premium channels on our television platforms. We also allowed more flexible access to mobile data.

What is Telekom Srbija’s attitude toward sustainability and social responsibility?

Sustainability is embedded in our decision-making and in everything we do. We embrace the principle that profitability must go hand in hand with our societal contribution and climate protection. We also strongly feel we have a responsibility to give back to Serbian society.

As a business, we have a vital role and a big responsibility in helping to address societal challenges. In a post-COVID world, digitalisation enabled by telcos can create new businesses, expedite economic recovery and contribute to greater digital inclusion bridging the current digital gap and accelerating the climate transition.

For the past years, we have been building ties with the community which do not rely only on the telecommunications infrastructure. We also try to share a part of our business success with the community and thus contribute to the creation of a better society for all.

What does the long-term future hold for Telekom Srbija?

Looking further ahead to the rest of this decade and beyond, we see big challenges for the European integration project and equally big opportunities for Europe’s digital future.

We see digital opportunities as a big part of a more sustainable future of the Serbian economy and society. This will make it possible for us to increase the efficiency of our operations, optimise costs and improve customer experience, which are our key strategic priorities. Digitalisation can unlock unlimited potential and hidden revenues for businesses and Public Administration by freeing up resources for more crucial tasks. I am confident that investing in digital technology and innovation can bring tangible results and make positive steps towards a greener and more resilient tomorrow for our customers, investors and partners.