Friday, March 18, 2005

MOBILE TELEPHONY - THE KOSOVAR CONNECTION

Belgrade, March 3 - One of them lives in Kosovo and is an owner of a printing house, tobacco factory, brewery, a radio station, TV station, chain of restaurants and hotels, a basketball team, and has a special gift on trading, with a special accent on cigarettes and weapons. He is close to the Prime Minister Ramush Haradinaj, whose party, it is said that he helped a lot, as well as other activities outside the party.
The other one lives in Belgrade and together with his large family he owns a number of journals, a TV station, a part of mobile telephony and a lot of other things. He has always been close to personalities he should have been close to.
The first one is called Ekrem Lluka, while the name of the second one is Bogoljub Karic. Beside their deep wallets and political connections, not that long ago they were connected also by an agreement on official and technical cooperation.
In fact the Company "Mobtel" owned by Karic family and the public company PTT of Serbia and company "Mobikos", owned by Ekrem Lluka have signed an agreement on December 2003, according to which "Mobtel" gives to "Mobikos" the rights of use of the capacities and the infrastructure of the GSM network of "Mobtel" in the territory of Kosovo and the right of providing the services of GSM network mobile telecommunications owned by "Mobtel" in the same territory.

Words and Thesis

The agreement signed in Belgrade and known in "Mobtel" under code 12088/03 for a long period of time has been a subject of various discussions, rumors, and denials.
More than a year after this agreement was reached, it was proven that all these discussions essentially were not true: according to the fax message of the agreement received by "Vreme", it becomes clear that the issue here is not about selling in the full meaning of the word, nor the rights to use, nor any kind of small business maneuver, as it was suggested until this time.
But, the best answer to the question on what this document is really about stands exactly on the studies of statements, starting from the first one.
The first concrete voices on business cooperation between Karic and the man that even in Kosovo is considered to be "controversial" had been raised by the actors themselves.
At the middle of December 2003, Prishtina's daily newspaper "Koha Ditore" has written that after "few months' long discussions with 'Mobtel'", Lluka has bought the license of this operator for Kosovo.
The BK group (Karic Brothers) had denied this news on the same day, stating that Lluka enjoys only "the exclusivity on providing their services" and that "nobody has the right to buy the license of 'Mobtel'".
However, only one month after the signing of this contract, on eighth of January 2004, Lluka through an interview with the weekly journal "Java" from Prishtina informs with honor that he has bought a part of "Mobtel" company in Kosovo: since at the same time in stands allover Prishtina you could buy "Mobikos" credit for 063 numbers, printed in Albanian, there were lots of those who believed that the kosovar portion of "Mobtel" was really bought.
This commercial later resulted with harming mostly Ekrem Lluka himself, even though it is logical the statement that it is in the interest of the owner of "Mobikos" any kind of explanation of the presence of "his credits for 063" but he seemed to forget that in Prishtina any kind of connection with Karic's "Mobtel" is unwanted.
Six months after Lluka's statement, when the agreement with "Mobtel" was broken and the position of the strategic partner was taken by the Slovenian operator, "Mobitel", "the buying" of the kosovar portion of "Mobtel" strongly and dangerously came back to the buyer.
Only one day after Lluka and his Slovenian partner won the contract on the second mobile operator in Kosovo, the former prime minister Bajram Rexhepi stated that there were indications that the decision was brought "under political, industrial and other pressure" while the minister of Telecommunications, Zef Morina explained that "Mobikos" while bidding was in fact "working in favor of 'Mobtel'". However, the bid was canceled and at least temporarily everything was left behind. In contrast from Ekrem Lluka, the Karic brothers did not have that many reasons to repent for their former business connections with him: all the media articles on the existence of agreements passed away somehow unnoticed.
Otherwise there was a very small number of possibilities of raising a big issue out of this since Ekrem Lluka's story seemed to impossible to believe in, while on concrete elements of the agreement there were only speculations.
However, even at the time of their reaction, the Karic brothers used arguments that seemed to be undeniable. One of their main arguments in order to deny "the selling" of a portion of "Mobtel" was the calling on a fact that even in 1999, after the international troops entered in Kosovo, Karic brothers had the opportunity to get the license from the United Nations for operating the 063 for fifteen other years. The same argument was used for the continuous remarks from the kosovar institutions that in order to operate in Kosovo, "Mobtel" has to pay taxes.
It was foreseen that the empowerment of the Law on Telecommunications and the announcement of the bid for a second mobile operator would in the meantime change this situation. "As for 'Mobtel', I can say that temporary agreements were made in 1999, so that we could cover the telecommunications needs at that time since there was no other mobile operator in Kosovo. But, if we take in consideration the actual state of the country and the development of mobile telephony, "Mobtel" should rearrange its position", was explained on October of 2004 by the UNMIK spokesperson, Chris Thomson.
Besides the position of "Mobtel" in Kosovo, the Karic Group was arguing also through the agreement itself. While reacting on the text considering the cooperation of Ekrem Lluka and "Mobtel" published on October fourth 2004 in "Internacional", Karic group said that "Mobikos" is one of the distributors of 063 credits. This was an imposed solution because since 2000, the Kosovar government has been obstructing the functioning of "Mobtel" in Kosovo and did not allow that the sale of credits be done directly by "Mobtel". At the same time this was one of the first cases to show that it was not all about the credits: at that time "Mobtel" had reached and agreement with "Mobikos", which beside the distribution of credits had also taken the responsibilities of security over the people and equipment owned by "Mobtel". This was the only way of protecting the lives of engineers and technicians that were maintaining the network and the transmitters save the equipment and to ensure the functioning of the system in Kosovo", was said in a statement by the Karic group. Besides, it was let known that the cooperation with Lluka was in the meantime interrupted because his company "did not fully respect the points made in the mentioned contract". From sales, to distribution of credits, we have reached the point of security of people and equipment. The last study of the agreement shows that all these formulations were at the same time true as well as constructed: the agreement between Karic brothers and Lluka was, depending on interpretation, a bit of everything. Sales, distribution of credits and security of ownership.

National (Interest)

The survey over the agreements between "Mobtel" and "Mobikos" itself shows that it is about serious cooperation with a number of ownership and financial implications. (As the framework states!) If it wasn't like this, "Mobtel" would find it very difficult to oblige itself to practically hand over in use everything it owns in Kosovo, additionally training of experts and assistance in management, as well as "Mobikos" would find it difficult to promise that, for instance "would invest in the development of the GSM network, so that the infrastructure would transform under the ownership of 'Mobikos'". Thing like these would in normal conditions of business agreements would be issues of management and decisions to be made by the company itself and not of its partners.
Beside two initial articles that deal with the responsibilities of the signatories, article 7 is worth of attention, which tends to regulate the payments for provided services. According to this article, "Mobikos" is obliged to pay "Mobtel" the sum equivalent to 30 percent of the net value of all users of the post-paid system, that is thirty percent of each sold "Mobiklik" package and thirty percent of the value of each sold voucher of the pre-paid network of "Mobtel", that is the statistics of created telecommunication traffic. Are we talking about a fair agreement or not is not a subject of this story. But, according to an invoice that came to the hand of "Vreme" it seems that article 7 was not fully respected, or most probably was changed during the negotiations.
In fact, the invoice which was sent to Mobikos" from "Mobtel" on January 30 2004, it is obvious that Mobikos was accounted for 50 percent of the overall sales of credits and that Mobtel instead of 30 percent took half of generated income. "Vreme" did not receive any answer on the question of the equivalent of 50 percent, so it can only be speculated on the 20 percent difference lost from the agreement.
Comparison of the agreement, invoices and some statements and comments shows some other issues that do not make sense in this story. Less than a month ago, Bogoljub Karic in an interview for the magazine "Evropa" explained how "Mobtel" signed an agreement with Ekrem Lluka for "a credit sales provider" and how Lluka paid 700 thousand Euros instead of 1.1 million during the first three months. Leaving aside now the fact that Karic has repeated once again the forgotten story about credits provider, it becomes more important how Lluka's account for three months be only Euro 1.1 million. According to the invoice released at the end of January 2004, it is clearly said that Mobikos for this period is obliged (one month after the signing of the contract) is Euro 835.869. Having in mind that this is an invoice for only one month, it is logical that Lluka would be obliged for the period of three months three times as much. Shortly the only thing that remained unchanged from the thesis and explanations around the contract from the first day is the argument given by the Karic Group that this is a matter of defending national interest and ownership that would otherwise be destroyed.

(On tomorrow's newspaper: What is the content of detailed contracts, "Mobtel" and "Mobikos" bonds?)

Taken from the Weekly Belgrade Newspaper "Vreme"

MOBILE TELEPHONY - THE KOSOVAR CONNECTION (2)

What is the content of detailed contracts, "Mobtel" and "Mobikos" bonds?

Belgrade, March – The payment is not the strangest element included in the technical-official agreement between “Mobtel” and “Mobikos”. Most surprising is that the contract is signed without the knowledge of one of the owners of “Mobtel”, public company PTT of Serbia. Even though in a short conversation with “Vreme”, deputy director of “Mobtel”, Goran Bozic states that such an agreement could not be signed without prior knowledge of PTT management and managing council, reliable sources of journal “Vreme” state the opposite. According to those at the moment of contract signing, PTT was being managed by the acting director; the company was in “total chaos” while about the agreement with “Mobikos” “they understood only twenty days ago”. In favor to this goes also the article published in Belgrade based journal “Ekonomist”, on January 19, 2004.
Earlier when the right to use\selling\cooperation between “Mobtel and “Mobikos” were mentioned, no one, not even the PTT could not give any comment. Or, sticking to the above given quoting: “When this question was put to PTT, they looked a bit confused”. Even though more than one year have passed since the agreement was reached, it is still difficult to say who really knew about it, it seems too unbelievable that no one from PTT couldn’t reach the text of this contract.
During 2004, PTT and Karic group were criticized considering ownership relations in this company, while eventual public announcement of this document would ensure a lot of positive points for PTT in this duel. Even if we forget the (non)knowledge of PTT as a co owner of “Mobtel”, it still remains unclear how the responsible institutions for one year did not react about an agreement about which it was written by the media in Prishtina and Belgrade.
First of all it is unclear that the statement made by Lluka that he had bought "Mobtel" in January 2004 nobody even tried to deny, while it could be considered to be under the responsibility of Serbian Ministry of Transport and Telecommunications and the Ministry of Economy and Privatization and many others. If the argument for this is "we did not know" it raises the question of the possibility of not knowing, and how is it possible that those responsible still do not know.
According to "Vreme"-s sources the agreement between "Mobtel" and "Mobikos" not so long ago went to "analysis" in the Directorate Against Organized Crime. More specifically in MUP (Ministry of Internal Affairs) and in all important offices in the country. In response to this factual situation, until now only one member of republican parliament has given a statement: the actual president of Serbia (otherwise former minister of Telecommunications, while the prime minister and the others are still staying in silence).
Beside all the confusions related to the meaning and the interpretations of the contract, there is still present the confusion imposed to us at first sight considering the selection of the partner in Kosovo. In fact, even though it is clear that Ekrem Lluka is a very powerful man to protect "Mobtel" property, it is unbelievable that the Karic brothers choose exactly him: a man with a reputation for his different connections even those of terrorist nature, connections with Ramush Haradinaj and Agim Ceku, accusations on smuggling and trade with everything and everyone, none of these are wanted points in a resume of a business partner, which should be considered to be serious and trustworthy.
A number of sources from Prishtina say that that it is a matter of the "Peja connection", since LLuka and the Karic brothers are, how should we say, home brewn, while the others consider that the choice of partner was done because of Llukas political connections, which provided guarantees for respecting the contract. What is more important now is that finally the existence of the famous contract is confirmed and that it doesn't even mention the distribution of 063 credits. And this is enough for a beginning.

"Mobtel" bonds

Article 2 of the contract on technical and business cooperation states that during the timeframe of this contract, "Mobtel" is bond to: Hand over to "Mobikos" the rights to use the existing infrastructure of the GSM network in the territory of Kosovo, the right of providing services of the GSM network to all users in this territory, the right to temporarily use the company name, logos on goods and services and other business distinctive, the knowledge that refers to the subject of this contract including all the necessary documentation (technical and business information on marketing methods; knowledge on organizational issues such as distribution of goods, and ways to get to new consumers and clients, information on introduction of goods and services etc. as well as other services aiming to ease the management of works to be done under the contract (assistance on locating and establishing the residency, training of "Mobikos" staff, assistance on management of commercials and marketing campaigns, preparation and publishing of information on trade etc). Identification brand which would be used by "Mobikos" in business and the way of using the same would be arranged in a special protocol of this contract;

-provide sufficient capacity which would ensure enough connecting points in own centers covering the territory of Kosovo (central point in Nish);

-provide "Mobikos" with exclusive rights to distribute-sell SIM post-paid and pre-paid credits and vouchers, through sales of valuable credits, use of internet, EFT and POS terminals and other forms of electronic trading;

-to ensure as much as possible technical-technological conditions for the use of all services provided by GSM 063 in the mentioned territory under article 1 of the contract;

-to organize trainings on own expenses of technical and commercial staff from "Mobikos" which would be doing management jobs, providing services, trading and introducing the SIM post-paid and pre-paid credits and vouchers, while additional costs on training would be carried out by "Mobikos";

-inform "Mobikos" on time on companies activities that have to do with different kinds and forms of services that "Mobtel" provides in territories from article 1 of the contract and about the measures taken for technical-technological advancements of the GSM network;

-inform "Mobikos" on time on eventual or planned changes fare policies and together with "Mobikos" agree on the prices of services on the mentioned territories on article 1 of the contract;

-ensure continuous and quality functioning of the GSM network on the territory mentioned under article 1 of the contract;

-that in compliance with business policies and technical abilities in the foreseen period, and no later than six months after the agreement is reached enable "Mobikos" the use of the code of mobile telephony network, a number to be confirmed ( the so called number of the network);

-that "mobikos" be provided with assistance of experts on trade analysis, business prognosis, turnover of goods and services, solving of remarks and objections by the users of provided services.

Just in case

As careful businessmen, Ekrem LLuka and his serb partners under article 12 of the contract have stated as follows: "The contract may be lost under the conditions of a force majeur. As force majeur in this contract were included: war or armed conflict, uprisings, civil war, strike, natural catastrophes, acts taken by governments and all other possible events that could be announced in any court of law as force majeur". The only thing that remains unclear is how the contract can be "lost".

"Mobikos" bonds

Article 3 of the signed contract between "Mobtel" and "Mobikos" consists of 23 points within which "mobikos" bonds are explained, but the most important are the initial four of them. So, according to the contract "Mobikos" is obliged to- give annual projection of development plan of GSM network and providing (sales) of services on the territory under article 1 in time, so that the annual plan should be based and in compliance with the business and development plans of "Mobtel" for the same period;

- that all its activities get focused on maintenance of existing infrastructure and the development of the GSM network, which should fulfill technical criteria and standards required by "Mobtel" and which should comply with the existing "Mobtel" network on the territory mentioned under article 1 of the contract. At the same time, "Mobikos" binds that on its own expenses provide locations with all the necessary infrastructure and the necessary documentation for smooth functioning of all basic stations independently, together with this in the network GSM, as well as the permit for radio frequencies;

- that in cooperation with "Mobtel" to ensure the release of permit and the necessary approvals for fulfillment of objectives of this contract;

- to invest in the development of the GSM network in the territory of Kosovo during the validity of the contract, starting from the date when the agreement is reached with the condition that this infrastructure be owned by "Mobikos".

Business Language

Even though local politicians, even Bogoljub Karic insist on naming "with full name" - Kosovo and Metohija or Kosmet, in the agreement signed by the representatives of "Mobtel" and "Mobikos" the word Metohija does not exist. It is well known that Albanians are allergic to the name Metohija; it seems that the Karic brothers have accepted the language aproach of their Albanian counterpart.

The Karic Response

Since the agreement was reached on December 8 2003, between"Mobtel" and "Mobikos" "Vreme" on February 28 2005 contacted the information service of "Mobtel" and has sent few questions by fax about some points of the agreement. The questions focused in the obvious fall of Ekrem Lluka, main reasons of making this agreement, as well as the information about who else was informed about this agreement. The answer of the information service we are presenting as a whole without any intervention.
"After the 1999 bombings, the company "Mobtel" thanks to the outstanding efforts of its employs has managed to rebuild of the complete network, keep its capacities and continue to offer services in the region of Kosovo and Metohija. How important were these facts it was shown during the developments on the 17 and 18-th of March in Kosovo.
Wishing to save the name and resources of the Serb state in Kosovo and Metohija, above all, for the Serbs that still remain in the region, ensure connection with Serbia and the rest of the world, the company "Mobtel" has signed tens of agreements on technical cooperation's with Kosovar companies, Albanian as well as Serbian. All these agreements were sent to UNMIK, KFOR, Serb Government, Ministry of Internal Affairs ... One of those agreements was about technical cooperation with "Mobikos", owned by Ekrem Lluka. Still, this agreement signed for one year was not extended, while because of attempts of abuse, a lawsuit is being led against the second party.
None of the agreements which "Mobtel" has reached with Kosovar companies, were not attrective to the media, except the agreement with "Mobikos". According to the obvious scenario trying to cover up the participation in the biggest scandals in Serbia, specific centers have used this agreement for a medial campaign aiming to discredit Bogoljub Karic. "Blic" has also written about this issue, from June to September of last year. From September to December, the same issue was written about in "International", and at the start of New Year the weekly "Evropa" as well as RTV B92 with a special show on "Mobtel".
The goals of these centers are clear that with media haunting of Bogoljub Karic, hide the key actors of the largest scandals in Serbia. From the weapons trading, drugs, oil, cigarettes, alcohol, from 4,5 billon dollars, steeling of the Serbian citizens, taken from the state owned, and put to private property, which from the blessed exotic islands of Serbia look as if thy are looking at their war prey. Bought by us with our own money. While Bogoljub Karic and Karic Bank was accused of drawing money out state. Now the local public has the information and documentation on who has stolen and who enabled the biggest theft in the history of Serbia.
Against all the media as well as the weekly "Vreme", which were part of the campaign against Bogoljub Karic and the company "BK Group", a trial is initiated, which is not finished still.
With all the respect for the work and your press run, as well as the donors wish to write about this issue, we hope that you will publish at least a part of our answer.