The Egyptian communication company Orascom Telecom (OT) pulled out from the contest over 70 percent of Serbian Mobi 63 Company that the Serbian government has marked for privatization. The move came after the Egyptian company had been included among the shortlist of qualified regional and international bidders in the deal.

Naguib Sawiris, chairman of OT, told NOOZZ that his company’s strategy for expansion would focus on countries with large populations in the coming period. “But OT would not join in competition over the Serbian operation due to political obstacles and assessment of returns in the first years,” he explained.

The Serbian government had announced earlier this year that it would sell 70 percent of Mobi 63, setting an initial price of $977 million (LE 5.6 billion) for the company which has approximately two million subscribers. The government also set as conditions for bidders to have at least three million subscribers and more than $610 million (LE 3.5 billion) of profits in 2005.

Competition over the Serbian operation drew several international bidders, such as Telenor of Norway, Etisalat of the United Arab Emirates and other operations from Austria, Israel, Germany, Russia and Sweden.

Telenor ASA of Norway offered Monday to buy Mobi 63, Serbia's cell phone company for $1.92 billion (LE 11 billion).

Telenor ASA outbid Mobilkom Austria AG and OT at an auction in Belgrade organized by the government, which holds 70 percent in Mobi 63, and a group of Austrian investors who control the remaining 30 percent of the company.

There is only one other mobile telephony provider in Serbia, state-owned Telekom Serbia, and the government has pledged that, following the successful sale of Mobi 63, it would not open the market for a third operator in the next 2 years.

The sale is expected to end a long-standing controversy surrounding Mobi 63, originally named Mobtel, which was founded in 1994 by the government and Serbian tycoon businessman Bogoljub Karic.

Amid an ownership dispute last year between Karic and the state, the tycoon sold his stake to the Austrian investors, who then reached an agreement with authorities to reform and rename the company as 70 percent state-owned and 30 percent in the hands of the Austrian Holdenhurst Holding. Karic has since fled the country, dodging an arrest warrant on charges of contract violation, corruption and fraud. Agencies

Daily Star Egypt