US mobile operator Western Wireless International (WWI) has decided to sell the network of its Slovenian subsidiary, Vega, to the two leading mobile operators in the country, Mobitel and Simobil for EUR 5m. The move marks the end of WWI's rocky five-year adventure in Slovenia.
According to Telekom Slovenije, its mobile arm Mobitel, which is the leading operator in the country, is to purchase 191 base station locations with all the accompanying equipment for EUR 2.5m.
Meanwhile, Slovenia's second-largest mobile operator, Simobil, will buy 135 Vega base stations, also for EUR 2.5m.
In Wednesday's press release, Simobil said the acquisition would improve the quality and coverage of its network. Moreover, it said it would offer favourable terms for Vega subscribers to switch to Simobil's network.
Vega commented on its decision Wednesday by saying that it regretted having to pull out of Slovenia. "The company now saw prospects in terms of changes on the Slovenian electronic communications market that would justify additional investment," Vega said.
According to Vega, its subscribers will be able to continue using the Vega network until the end of May whereupon they would have to switch operators while keeping their number.
Telekom Slovenije also announced on Wednesday that it signed with Vega a deal on the mutual withdrawal of lawsuits.
Vega and WWI will therefore withdraw the SIT 48.8bn (EUR 203.7m) damages suit against the state and Mobitel that it filed last year for obstruction of competition. Telekom Slovenija, meanwhile, is to stop legal action against WWI for unpaid bills, Telekom added in the press release.
In response, Economics Minister Andrej Vizjak said the decision for Vega to withdraw the lawsuit against the state was logical as "Vega's claim was completely unfounded".
"We will now avoid unnecessary court courts," added Vizjak, who believes WWI's decision to leave Slovenia will not have a negative impact on foreign direct investment in Slovenia.
"Every foreign investment is a business project that must be feasible and for which the government cannot be held accountable...those making business decisions must assume responsibility for mistakes," he added.
Vega entered the Slovenian market in 2001 and immediately launched an aggressive advertising campaign that was successful at first.
But after the initial boom, the company saw the number of its subscribers stagnate at 30,000, which is only 2% of the Slovenian market, well below initial plans of 20%.
Vega often complained of not being given a fair chance because of a lack of competition on the market. Government officials claimed that Vega's poor standing in Slovenia was a result of poor decisions on Vega's part.
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