UNAUDITED BUSINESS REPORT
TELEKOM SLOVENIA GROUP AND TELEKOM SLOVENIJE, D.D.
FOR JANUARY – MARCH 2008
Ljubljana, 20. maj 2008
WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 TABLE OF CONTENT
1 INTRODUCTORY NOTE ...... 2 2 OPERATING HIGHLIGHTS ...... 3 3 TELEKOM SLOVENIA GROUP – COMPOSITION AND ORGANIZATION ...... 4 4 CORPORATE GOVERNANCE ...... 4 5 AUDIT ...... 6 6 OWNERSHIP STRUCTURE AND SHARE TRADING ...... 6
6.1 OWNERSHIP STRUCTURE AND NUMBER OF SHAREHOLDERS AS ON 31 MARCH 2008...... 6 6.2 SHARE TRADING AND SIGNIFICANT FINANCIAL DATA REGARDING TLSG SHARES ...... 7 7 SIGNIFICANT BUSINESS EVENTS FOR THE PERIOD JANUARY – MARCH 2008 ...... 8 8 EMPLOYEES ...... 10 9 REGULATION ...... 11 10 BUSINESS REPORT ...... 12
10.1 OPERATING HIGHLIGHTS OF TELEKOM SLOVENIJE GROUP IN NUMBERS ...... 12 10.2 MARKET ASPECTS OF TELEKOM SLOVENIJE GROUP OPERATIONS ...... 12 10.3 INVESTMENTS OF TELEKOM SLOVENIA GROUP AND TELEKOM SLOVENIJE , D.D...... 13 10.3.1. Investment in telecommunications network and in other assets ...... 13 10.4 SERVICE AND NETWORK DEVELOPMENT – CONVERGENCE OF SERVICES AND CONTENT ...... 14 10.4.1 Fixed network ...... 15 10.4.2 Mobile network ...... 16 10.4.3 Network and service development in Kosovo ...... 16 10.5 KEY OPERATING HIGHLIGHTS OF INDIVIDUAL COMPANIES IN THE GROUP ...... 17 10.5.1 Telekom Slovenije, d.d...... 17 10.5.2 Mobitel, d.d...... 20 10.5.3 Ipko, d.o.o...... 21 11 UNAUDITED FINANCIAL STATEMENTS FOR PERIOD JANUARY – MARCH 2008 ...... 22
11.1 COMPOSITION OF TELEKOM SLOVENIJE GROUP ...... 22 11.2 UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE TELEKOM SLOVENIJE GROUP ...... 23 11.3 UNAUDITED FINANCIAL STATEMENTS OF TELEKOM SLOVENIJE , D.D...... 28 12 SIGNIFICANT EVENTS AFTER THE ACCOUNTING PERIOD ...... 32
1
WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
1 INTRODUCTORY NOTE
Pursuant to the provisions of the Rules of the Ljubljana Stock Exchange, Telekom Slovenije d.d., based in Ljubljana, Cigaletova Ulica 15, hereby publishes its unaudited business report for the Telekom Slovenije Group and Telekom Slovenije d.d. for the period January – March 2008.
All financial statements of the Telekom Slovenije Group and Telekom Slovenije d.d. have been prepared in accordance with International Financial Reporting Standards. Financial statements for January – March 2008 have not been audited.
The Supervisory Board of the company discussed the unaudited business report for the Telekom Slovenije group and Telekom Slovenije d.d. in the first quarter of 2008 at its 38th session on 29 May 2008.
The report is also available on the company's website at www.telekom.si and is also available for examination at the head office of Telekom Slovenije d.d., Cigaletova 15, Ljubljana, every working day from 10 a.m. to 12 noon.
All significant changes to data contained in the prospectus for the stock market listing are regularly published by the company on the Ljubljana Stock Exchange web portal SEOnet and on the company's website www.telekom.si .
2 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
2 OPERATING HIGHLIGHTS
Key indicators for Telekom Slovenije Group, first quarter of 2008
in thousand EUR I-III 2007 I-III 2008 Index 08/07 1 2 2/1 Operating revenues 185,275 187,182 101 Net sales revenues 183,689 186,207 101 Other operating revenues 1,586 975 61 Share of income from joint venture - 1,285 - Operating expences 152,057 152,529 100 OPEX - operating expences before depreciation 113,354 107,531 95 EBITDA 71,921 80,936 113 Depreciation 38,703 44,998 116 EBIT- Operating profit 33,218 35,938 108 Net financial revenues/expenses -2,009 -3,147 157 Income tax 8,331 9,141 110 Net profit 22,878 23,650 103 EBITDA margin 38.8% 43.2% 111 Profit margin 12.3% 12.6% 102
Key operating highlights
Telekom Slovenije - Number of classic voice telephony connections (end of 1Q2008 vs. 1Q2007): - 70.0 thousand - Number of broadband connections (end of 1Q2008 vs. 1Q2007) : +52.9 thousand (of that +26.4 thousand on wholesale market) - Continuing rapid growth in international transit traffic
Mobitel - High financial returns for stable number of connections and traffic
Convergence - Realisation of first steps: “quad-play ”, merger of Teleshops and Mobicentres, SAP etc. - Preparation of the group reorganisation project in cooperation with consultancy Boston Consulting Group
Content - Reorganisation of Planet 9 – i.e. centralisation of TV-related activities
South-Eastern Europe - Outstanding success of IPKO – on 31 March 2008 it had more than 200,000 active mobile telephony users - Continued consolidation of broadband and cable operators, particularly in Republika Srpska and Albania - First contacts in Bosnia-Herzegovina in relation to privatisation of BH Telekom - More than 340% growth in broadband users
3 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
3 TELEKOM SLOVENIA GROUP – composition and organization
The parent company in Telekom Slovenije Group is Telekom Slovenije d.d. The composition of the group of companies associated with Telekom Slovenije d.d., together with ownership stakes as at 31 March 2008:
Sloveni a Telekom Slovenije, d.d. Foreign countries
Mobitel, d.d. 100% On.net,d.o.o. (Macedonia) 83,38%
Planet 9, d.o.o. 76% IPKO, d.o.o. (Kosovo) 63,75% . Soline,pridelava soli, d.o.o. 100% Blic.net, d.o.o.* (BIH–Republic of Srpska) 70%
M-Pay,d.o.o. 50% Gibtelecom ** (Gibraltar) 50%
GVO, d.o.o. 100% AOL SP, d.o.o. (Albania) 75%
Avtenta.si, d.o.o. 100% Aneks, d.o.o. (BIH –Republic of Srpska) 70%
Teledat, d.o.o. 100%
Interseek, d.o.o. 75%
Najdi.si,d.o.o. 100% Pogodak, d.o.o. (Serbia) 100%
Pogodak tražilica, d.o.o. (Croatia) 100%
Planet 9, d.o.o. 24%
* Change from 100% to 70%, on 25 January 2008 ** Jointly controlled company
4 CORPORATE GOVERNANCE
Management Board
Telekom Slovenije, d.d. is managed by a five-member management board comprising:
• Bojan Dremelj, MSc, President • Dušan Miti č, Vice-President • Dr Filip Ogris-Marti č, Member • Željko Pulji ć, MSc, Member • Darja Senica, Member and employee director.
There were no changes to the board in January – March 2008.
Supervisory Board
The company's supervisory board comprises nine members, six of whom are representatives of capital and three employee representatives. Members of Supervisory Board at the end of March 2008:
Representing capital: • Damijan Koletnik, President • Dr Borut Štrukelj • Dr Andrej Brodnik • Pavel Žakelj • Karmen Ponikvar • Dr Peter Groznik 4 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Representing employees: • Branko Sparavec • Milan Richter • Martin Gorišek
There were no changes to the supervisory board in January – March 2008.
Governance of Subsidiaries
Mobitel, d. d. Management board: Bojan Dremelj, MSc, President, Dr Filip Ogris-Marti č, Željko Pulji ć, MSc, Klavdij Godni č, Metod Zaplotnik, Tjaša Škrilec and Branko Miklav čič Chief executive officer: Klavdij Godni č
GVO, d. o. o. Director: Jožefa Guzej
Avtenta.si, d. o. o. Director: Iztok Klan čnik
Teledat, d. o. o. Director: Bojana Sonnenwald Turk
Interseek, d. o. o. Director: Aleksander Sašo Štravs Deputy director: Zvone Jagodic
Planet 9, d. o. o. Director: Tomaž Jontes
On.net, d. o. o. Supervisory board: Dušan Miti č, Vladimir Peševski Director: Predrag Čemeriki ć *NB: Corporate governance complies with relevant legislation in the Republic of Macedonia
Ipko Telecommunications, d. o. o. Management board: Dušan Miti č, President, Bujar Musa, Vice-President, Akan Ismaili, Klavdij Godni č, Tomaž Kraškovic MSc Chief executive officer: Akan Ismaili *NB: Corporate governance complies with legislation in Kosovo
Blic.net, d. o. o. Management board: Željko Pulji ć, MSc, President, Boštjan Kralj, MSc, Darko Simi ćevi ć Director: Nebojša Antonijevi ć *NB: Corporate governance complies with relevant legislation in Republika Srpska (Bosnia and Herzegovina).
Aneks, d. o. o. Management board: Željko Pulji ć, MSc, President, Boštjan Kralj, MSc, Darko Simi ćevi ć Director: Nebojša Antonijevi ć *NB: Corporate governance complies with relevant legislation in Republika Srpska (Bosnia and Herzegovina).
AOL SP, d. o. o. Directors: Dušan Miti č, Robert Mane, Ylli Panariti, Boštjan Kralj, MSc, Bujar Musa Executive director: Ylli Panariti *NB: Corporate governance complies with relevant legislation in Albania.
Gibtelecom Management board: Joe Holliday, President, Tim Bristow, Dilip D. Tirathdas, Bojan Dremelj, MSc, Dr Filip Ogris Marti č, director, Klavdij Godni č Chief executive officer: Tim Bristow *NB: Corporate governance complies with relevant legislation in Gibraltar.
5 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
5 AUDIT
At its 14th regular session called for 30 June 2008, the shareholders' assembly of Telekom Slovenije d.d. will decide on the appointment of an auditor company that will audit the financial statements for the 2008 business year. The board proposes to reappoint Ernst & Young, which conducted the audit for 2007.
6 OWNERSHIP STRUCTURE AND SHARE TRADING
6.1 Ownership structure and number of shareholders as on 31 March 2008
On the last day of the first quarter of 2008, there were 12,782 shareholders in the register of shares of Telekom Slovenije d.d. The rising trend continues in 2008 – in the first trimester the company acquired 383 new owners, with 1,899 more shareholders than on the same date in 2007.
Ownership structure Domestic Foreign corporate corporate investors; investors; Institucional 5.86% 3.31% investors; 5.67% Individual shareholders; 10.56% Treasury shares; 0.46% Republic of Slovenia; Slovenska 52.53% odškodninska družba (state fund); 14.25% Kapitalska družba with PPS (state fund); 7.36%
Number of shareholders
31 March 2008 12,782
2007 12,399
2006 10,111
2005 8,416
2004 8,355
2003 7,930
6 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Top 10 shareholders
On 31 March 2008, the 10 largest shareholders owned 80.74% of the subscription capital of the company, 0.80 percentage points more than a year before.
31 March 200 8 31 March 2007 Shareholder % Shareholder % Republic of Sloveni a 52. 53 Republic of Sloveni a 62. 53 Slovenska odškodninska družba, d.d. 14. 25 Kapitalska družba d.d. 5. 59 Kapitalska družba d.d. 5. 59 Slovenska odškodninska družba, d.d. 4. 25 NFD 1 delniški investicijski sklad d.d. 2. 26 NFD 1 delniški investicijski sklad d.d. 1. 86 Kapitalska družba d.d. - PPS 1. 77 Kapitalska družba d.d. - PPS 1. 77 Admark Trust Reg, C/O.Mareco Treuhand. 1. 36 Aktiva naložbe, d.d. 1.24 Confinvest Aktiengesellschaft 0. 89 Delniški vs Triglav steber I 0. 91 Maksima holding d.d. 0. 78 Maksima holding d.d. 0. 78 Delniški vs Triglav steber I 0. 76 Poteza naložbe d.o.o. 0.51 Poteza naložbe d.o.o. 0. 55 Confinvest Aktiengesellschaft 0. 50 Total 80. 74 Total 79 .94
Shares owned by the Management Board and the Supervisory Board of Telekom Slovenije, d.d. as on 31 March 2008
Number of % of capital Name and surname Function shares
Management Board Bojan Dremelj, MSc President 100 0.0015 Dušan Miti č Vice-President 500 0.0077 Filip Ogris – Marti č, PhD Member 403 0.0062 Željko Pulji č. MSc Member 300 0.0046 Darja Senica Member 338 0.0052
Nadzorni svet Damijan Koletnik President - - Borut Štrukelj, PhD Member - - Andrej Brodnik, PhD Member - - Pavel Žakelj Member 95 0.0015 Karmen Ponikvar Member - - Peter Groznik, PhD Member - - Branko Sparavec Member - - Milan Richter Member 1 0.0000 Martin Gorišek Member 125 0.0019 Skupaj 1, 862 0. 02 85
6.2 Share trading and significant financial data regarding TLSG shares
TLSG share trading statistics at the Ljubljana Stock Exchange in period January-March 2008
Share price Highest price in EUR 415.64 Lowest price in EUR 245.45 Average price in EUR 319.78 Volume Volume in mio EUR 33.48 Volume with block trades in mio EUR 37.42 Highest daily volume in mio EUR 2.35 Lowest daily volume in mio EUR 0.11
7 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
TLSG share price movement and volume of trade on the Ljubljana Stock Exchange and comparison with SBI20, in period January – March 2008
EUR 420 SBI20 12.000 2500 000EUR EUR 420 400 400 380 380 360 11.000 2000 360 340 340 320 1500 10.000 320 300 300 280 1000 280 260 9.000 260 240 500 240 220 220 200 8.000 0 200
Share price in EUR SBI20 Turnover in 000 EUR (incl. Block trades) Share price in EUR
Some financial data regarding TLSG shares
31.3.2008 31.3.2007
Market price of share in EUR 254.55 384.96 1 Book value of share in EUR 133.72 132.23 2 Net profit per share in EUR 3.64 3.52
P/E ratio 69.93 109.36
Market to book value ratio 1.90 2.91 Capital gain in % for the first 3 months 3 - 38.33% 22.74% Number of Treasury shares 30,000 30,000 Number of issued shares 6,535,478 6,535,478 Number of shareholders 12,782 10,883
1 The book value per share is calculated as the ratio between parent company equity and the number of shares issued, less the number of treasury shares.
2 Net profit per share is calculated as the ratio between the net profit of the Telekom Slovenia Group and the number of shares issued, less treasury shares.
3 Capital gain per share is calculated as follows: (share price on last trading day in March – share price on first trading day in January) / share price on first trading day in January
Dividends
The proposal to use undistributed net profits for 2007, which will be subject to a vote at the 14th shareholders' assembly called for 30 June 2008, envisages the payment of dividends amounting to EUR 12.80 per share.
7 SIGNIFICANT BUSINESS EVENTS for the period January – March 2008
January
Telekom Slovenije, d.d. received a lawsuit by Sinfonika, d.d. Telekom Slovenije, d.d., on 10th of January 2008, received the lawsuit from Sinfonika, d.d. to pay damages in the amount of 36,030,000.00 EUR based on alleged abuse of the dominating market position and breaching the terms of the sector legislation by offering the Centrex services. Telekom Slovenije, d.d. estimates that the lawsuit is completely groundless, because Telekom Slovenije, d.d. fully observes the valid legislation and the decisions issued by the Post and Electronic Communications Agency of the Republic of Slovenia, and conducts business in accordance with good business practices. 8 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Telekom Slovenije d.d. receives lawsuit and proposal for the issuance of a temporary injunction from AMIS d.o.o. Telekom Slovenije, d.d., on 18th of January 2008, received a lawsuit and proposal for the issuance of a temporary injunction from AMIS, d.o.o., Maribor alleging unfair competition and demanding the payment of damages in the amount of EUR 2,300,000.00. Telekom Slovenije d.d. will respond to the proposal for the issuance of a temporary injunction and the lawsuit by the legally prescribed deadline. The company assesses that the demands laid out in the lawsuit and the proposal for the issuance of a temporary injunction are entirely unfounded.
Mobitel's sales centers expand with Telekom's Teletrgovine offering. As a result of increasing integration and synergy within the Telekom Slovenije Group, the devices, services and consulting available in Telekom Slovenije's Teletrgovine shops will be transferred to Mobitel's sales centers with February. The integrated offering at one place will bring the group greater business efficiency and simplified procedures, but all of the users of mobile telecommunications, fixed telephony, internet and Siol TV will see the greatest benefits.
February
Telekom Slovenije, d.d. received a decision from Competition Protection Council of BIH. Telekom Slovenije, d.d., on 31th of January 2008, received the decision from Competition Protection Council of Bosnia and Herzegovina to pay a fine of 200.000 KM (102.000 EUR), because of failure to meet the time limit for registration of concentration of company Blic.net,d.o.o., BIH.
Telekom Slovenije, d.d. received the verdict of the Administrative court of the Republic of Slovenia. In the verdict court rejected the lawsuit of Telekom Slovenije, d.d., with which the company contested the provision by the Competition Protection Office from the day of 19th of November 2004. In the contested provision the Competition Protection Office established abuse of the leading position by Telekom Slovenije, d.d. in the considered market of leasing ADSL broadband access network to commercial internet access service providers in the area of the Republic of Slovenia in the years 2001-2003. The procedures at the Competition Protection Office were begun at the request of Medinet. Telekom Slovenije, d.d. will use extraordinary judicial review against this verdict of the Administrative court.
Oleander hotel in Strunjan sold. Pursuant to the strategies for optimisation of operations, and focusing on the basic activity of providing telecommunication services and content, Telekom Slovenije completed the sale of Oleander hotel in Strunjan.
March
Telekom Slovenije awarded ISO 14001 environmental certification. The ISO 14001 environmental management certification obtained by Telekom Slovenije brings with it an effective system of control and management of environmentally friendly business practices, reduction in the costs of energy and materials, training and motivation of staff for responsible and rational management of energy and materials, and a strengthening of the overall reputation of the company. This completes the project designed to introduce systematic regulation in the sphere of responsible environmental management by setting up a system based on the ISO 14001 international standard.
Dušan Miti č once again appointed member of the Management Board of Telekom Slovenije, d.d. On the basis of the conclusion of Supervisory Board of Telekom Slovenije, d.d., Dušan Miti č was once again appointed a member of the Management Board of Telekom Slovenije, d.d. for a 4 year term, starting on 1 of March 2008. Dušan Miti č will also continue attending the duty of Vice-president of the Management Board.
Mobitel introduces quad-play. Mobitel, a member of the Telekom Slovenije Group, is introducing quad-play to the Slovene market, a complete telecommunications service offering. The offering under the new M4 brand includes Mobitel GSM/UMTS services, broadband SiOL internet, SiOL telephony and SiOL TV.
Igor Marinšek, Mobitel executive officer, recalled. The Mobitel shareholder's meeting recalled the member of the board and the executive officer of Mobitel, Igor Marinšek. Recall is the result of conflicting views on the development of the Telekom Slovenije Group and the future of group companies.
Telekom Slovenije introducing WiMAX commercially. Following the conclusion of a successful trial period last year, Telekom Slovenije made the first commercial connection of the WiMAX wireless broadband network in Ljubljana’s Rožna dolina last weekend.
9 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Telekom Slovenije in Siteep reached a court settlement. Telekom Slovenije and Siteep reached a court settlement in three cases, which Siteep started against Telekom Slovenije in 2004. In accordance with the court settlement Siteep denounced the claims of these charges, and removed all three charges, and Telekom Slovenije paid Siteep, after the charges were removed, EUR 650,000.
State's stake in Telekom Slovenije shall not be sold to any of the providers. The Commission for the management and supervision of the procedure of the sale of the capital investment of the Republic of Slovenia in the company Telekom Slovenije d.d. decided to propose to the Government of the Republic of Slovenia the completion of the sale under an international tender. It proposed that the state's stake in the company shall not be sold to any of the providers, since a sale under the offered conditions would not be reasonable, as it would not fulfil the expectations regarding the aims entrusted to the commission by the Government of the Republic of Slovenia.
8 EMPLOYEES
Number of employees
As at 31 March 2008, Telekom Slovenia Group had 4,485 employees. This is 90 more than in 2007, primarily due to rapid growth of companies in South-Eastern Europe.
The employee structure by company is shown in the table below:
31.3.2007 31.3.2008 Index 08/07
Telekom Slovenije, d.d. 2,223 1,965 88 Mobitel, d.d. 1,000 1,078 108 Other companies in Slovenia 647 838 130 Ipko 160 444 278 Other companies abroad 121 160 132 Total Telekom Slovenia Group 4,151 4,485 108
Education and staff development
Education and training ensures that employees are suitably qualified for work, thereby improving their efficiency, success and work satisfaction, with the intention of achieving business objectives, increasing user satisfaction and providing the Telekom Slovenia Group with a competitive advantage. Employees are notified of innovations through internal newspapers and intranets.
In the Telekom Slovenia Group in the first quarter of 2008, the areas of education with largest participation were information-telecommunications technologies, dominated by education on WiMAX, Infranet and optics.
Organisation
With the objective of optimising business and efficiency in implementing processes, the first quarter of 2008 saw continued organisational changes involving the cessation and transfer of certain activities on the Telekom Slovenia Group company level:
- The SAP service, which had been organised within the Information Technology Department, was withdrawn, with management, development and maintenance of all functionalities of the SAP system transferred to Avtenta.si, d.o.o.
- Activities relating to the provision, development and management of convergent multimedia services were transferred to Planet 9 d.o.o. to round off its activities. As this activity was withdrawn, the Multimedia Services and Content Department was closed, and its employees transferred to the subsidiary.
- The activities of Teleshops – including staff in this segment – were hived off to Mobitel d.d. in order to ensure synergies, greater competitiveness and linking and supplementing telecommunications services of the Telekom Slovenia Group. 10 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
9 REGULATION
Relevant markets
Market 1-7 (retail market ) The Post and Electronic Communications Agency (“Agency”), in accordance with the ruling of the Administrative Court of 25 February 2008, determined Telekom Slovenije to be an operator with significant market power (SMP) for the period 12 May 2003 to 12 May 2004 in service segments of fixed public telephony services and fixed public telecommunications network.
There were no other new analyses, decisions or supervisory procedures in these relevant markets.
Relevant markets 8, 9, 10 (network interconnection) In market 10 (transit), the Agency by decision of 6 February 2008 determined Telekom Slovenije to be an operator with significant market power, and imposed the following measures: • Approval of all reasonable requests for operator access to network elements and capacities, • Obligation of equal treatment, • Obligation to ensure transparency, • Obligation of price control and cost accounting, within the framework of which a model of cost accounting using the LRIC method must be prepared by 30 November 2008, • Obligation of separate accounting records for 2008.
In market 9 (call termination) the Agency by decision of 21 March 2008 determined Telekom Slovenije to be an operator with significant market power. It imposed the following measures on Telekom Slovenije: • Approval of all reasonable requests for operator access to network elements and capacities, • Obligation of equal treatment, • Obligation to ensure transparency, • Obligation of price control and cost accounting, within the framework of which a model of cost accounting using the LRIC method must be prepared by 30 November 2008, • Obligation of separate accounting records for 2008.
Relevant markets 11, 12 (unbundled loops, broadband access) In market 11, Telekom Slovenije in accordance with an Agency decision provided a detailed description of the cost accounting system based on the LRIC method together with cost documentation. The system description and auditor's report were also published on the website.
In market 12, the Agency initiated a supervisory procedure in January, calling upon Telekom Slovenije to justify published prices for leased capacities between BRAS and edge devices. The procedure is still underway.
Relevant markets 13, 14 (leased lines) In accordance with the ruling of the Administrative Court, the Agency initiated a repeat procedure for operator with significant market power for the period 12 May 2003 to 12 May 2004 covering the leased-lines service segment. On 7 January 2008 it determined Telekom Slovenije to be an operator with significant market power.
There were no new analyses, decisions or supervisory procedures in these relevant markets.
Relevant market 16 (call termination services in public mobile communication networks) In accordance with the Agency decision, Mobitel calculated the price up to 31 March 2008 for termination of voice calls in its network on the basis of historic costs and the fully allocated costs method (FAC HCA), at the same time providing the Agency with a detailed cost calculation. Separate accounting records using the FAC HCA methodology (total gross operating balance) had to be sent to the Agency by the same date, when the company already has access to final data for 2007.
At the initiative of the European Commission, which is co-financing the project, the Agency began modelling its own costs model using the LRIC method, intended to determine the cost price of call termination in mobile networks.
11 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
10 BUSINESS REPORT
10.1 Operating highlights of Telekom Slovenije Group in numbers
January-March 2008 SLOVENIA FOREIGN COUNTRIES ELIMINATIONS TELEKOM SLOVENIA GROUP in thousand EUR Telekom Other Other Index Slovenije, d.d. Mobitel, d.d. companies Ipko companies I-III 2008 I-III 2007 08/07 Operating revenues 100,802 108,386 22,016 5,670 5,607 -55,299 187,182 185,275 101 Net sales revenues 100,357 108,157 21,901 5,670 5,598 -55,476 186,207 183,689 101 Other operating revenues 445 229 115 0 9 177 975 1,586 61 Share of income from joint venture 1,285 0 Operating expenditures 88,675 83,964 19,808 8,192 5,410 -53,520 152,529 152,057 100 OPEX - operating expences before depreciation 66,115 65,775 19,173 4,998 4,981 -53,511 107,531 113,354 95 EBITDA 34,687 42,611 2,843 672 626 -503 80,936 71,921 113 Depreciation 22,560 18,189 635 3,194 429 -9 44,998 38,703 116 EBIT- Operating profit 12,127 24,422 2,208 -2,522 197 -494 35,938 33,218 108 Net financial revenues/expenses 339 -1,233 29 -2,193 -54 -35 -3,147 -2,009 157 Income tax 2,667 5,797 661 0 16 0 9,141 8,331 110 Net profit 9,799 17,392 1,576 -4,715 127 -529 23,650 22,878 103 EBITDA margin 34.4% 39.3% 12.9% 11.9% 11.2% 0 43.2% 38.8% 111 Profit margin 9.7% 16.0% 7.2% neg 2.3% 0 12.6% 12.3% 102 Total assets 1,281,742 651,689 63,965 152,376 22,277 -456,294 1,715,755 1,529,402 112 Equity 869,898 431,198 30,184 22,723 13,530 -281,347 1,086,186 1,012,107 107
10.2 Market aspects of Telekom Slovenije Group operations
In line with general trends in telecommunications markets, Telekom Slovenije Group's operations at the start of 2008 were marked by growth in broadband and mobile connections and falling numbers of fixed-telephony connections. The decline of the latter in Slovenia has been compensated by connections in SEE.
Broadband connections
The year-on-year growth in the number of broadband connections in the Telekom Slovenije Group in the first quarter of 2008 was 49%. The largest contribution to this growth came from broadband connections in SE Europe, with more than fourfold growth.
Broadband connections
31.3.2007 31.3. 2008 Index 08/07 End-users 154,839 181,258 117 Wholesale 56,647 83,087 147 Slovenia 211,486 264,345 125 BIH - 4,092 - Macedonia 10,090 28,299 280 Kosovo 6,478 4,982 633 SEE Europe 16,568 73,373 443 Total Telekom Slovenia Group 228,054 337,718 148
Voice telephony
The number of mobile and fixed connections in the first trimester of 2008 was 6% higher than the previous year. The greatest share of this growth came from the provision of mobile telephony services in Kosovo, where we already have more than 200,000 users.
12 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Number of mobile and fixed telephony connections
31.3.2007 31.3.2008 Index 08/07 Slovenia, mobile telephony 1,268,976 1,247,071 98 Slovenia, fixed telephony 781,316 711,341 91 SEE Europe – fixed telephony 1,536 8,666 564 SEE Europe - Kosovo, mobile telephony 0 204,536 - Total Telekom Slovenia Group 2,051,828 2,171,614 106
Minutes of voice telephony
The total number of voice telephony minutes in the Telekom Slovenije group fell by 7% year on year in January – March 2008. Telekom Slovenije d.d. in particular recorded a fall in the number of minutes, although this was ameliorated by Mobitel with 2% growth and Ipko in Kosovo, which recorded 15 million minutes in mobile operations in the first three months.
Minutes (in mio) I – III 2007 I – III 2008 Index 08/07 Slovenia, mobile telephony 497.49 505.88 102 Slovenia, fixed telephony 541.04 443.61 82 SEE Europe - Kosovo, mobile telephony - 15.20 - Total Telekom Slovenia Group 1,038.53 964.69 93
10.3 Investments of Telekom Slovenia Group and Telekom Slovenije, d.d.
10.3.1. Investment in telecommunications network and in other assets
In the first quarter of 2008, Telekom Slovenije Group continued intensive investment activities. EUR 37.9 m was allocated to the construction, modernisation and development of networks and services. The following table shows the structure of investments by company:
(in thousand EUR) I-III 2007 I-III 2008 Index 08/07 Slovenia 29,307 30,683 105 Telekom Slovenije, d.d. 25,241 21,269 84 Mobitel, d.d. 3,470 9,083 262 Other companies in Slovenia 596 331 55 SEE Europe 2,762 7,255 263 Ipko 2,366 6,059 256 Other companies in SEE Europe 396 1,196 302 Total Telekom Slovenia Group 32,069 37,938 118
Telekom Slovenije, d.d.
In the first quarter of 2008, EUR 21.3 m was allocated to the renewal and modernisation of the network of Telekom Slovenije d.d. Investment structure by type:
13 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
1.7% 2.2% Construction 10.5%
Telecommunication network
Telecommunication equipment
Information system and TMN
Other investments 49.7% 35.8%
Financial investments of Telekom Slovenije d.d.
In the first three months of 2008, payment transactions and recapitalisation totalling EUR 21.2 m were carried out as follows: - EUR 5.7 for the purchase of a 70% stake in Aneks, - EUR 2.5 m for the purchase of a 75% stake in AOL SP, and - EUR 13.0 m for recapitalisation of Ipko.
Mobitel, d.d.
Investment structure by type:
8.7%
10.2% Telecommunication network Service network
8.9% Information support
General investments
72.1%
10.4 Service and network development – convergence of services and content
The Telekom Slovenije Group devotes considerable attention to the development of services and networks. Every year, the Group prepares numerous new solutions for users based on its own knowledge. The same strategy was followed in the first quarter of this year.
In the first quarter of 2008, in developing fixed-to-mobile convergence services, the Group again focused on the expectations of users with regard to accessibility and availability of any service from any network or terminal regardless of time or location. Emphasis was placed on personalisation and ease of use, as well as improving the effectiveness of workplace communication. Since this involves voice and video communication and access to multimedia content, it increases the demand for broadband access and mobile access. The initial offering of convergence services is also marked by the provision of the so-called four-play, where Telekom Slovenije Group is the very first provider in Slovenia to offer Internet access and television together with fixed and mobile telephony.
14 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
The Telekom Slovenije Group will continue to follow global trends in the future by implementing a gradual conversion from the existent network to the IMS concept. At the start of 2008 the Group continued to develop and offer commercial convergence services to companies that will be upgraded over the coming years in terms of both the offer and new technological solutions.
10.4.1 Fixed network
Network resources
The first quarter of 2008 saw a continuation of the trend for falling numbers of PSTN and ISDN users and growing broadband services. Due to the rapid action in terms of unit optimisation with released network resources, the usage rate of connection points in both instances fell by just 1 or 2 per cent. Through such interventions, the company follows the reduction or growth of the network dynamically, which allows for optimal utilisation of resources and growth in the number of reserve units, minimising the cost of repairs.
The growth of ADSL broadband service has risen and at the same time, DSLAM also grew by 17 units, resulting in 72% exploitation of the broadband network. In the most recent period, network exploitation has stabilised at the level of the preceding quarter.
On the IP network the company continued the project to protect critical elements of the network by doubling the connection to the hierarchical structure. By so doing, the company aims to increase network reliability in the event of failure of individual elements of transmission routes.
Important projects underway
1. Artificial line 2. IMS pilot 3. OCS 4. OpenTAS 5. Single Voicemail box 6. IP telephony – CRM upgrade
Broadband access network
In 2008 the company continued building the F2 network. In addition to construction work in densely populated areas in response to competitor activity, the company also focused on the elimination of bottlenecks in the network – the so-called black spots – areas, where broadband access is limited. Construction of FTTN is seen as a solution to eliminate of black spots in suburban areas and in rural areas.
In the first quarter the construction of the xDSL network continued, primarily in locations where completion of construction of fibre optic or radio connections was planned. This reduced the number of locations with no installed equipment for broadband services. These are mostly smaller locations in rural areas where construction of optical backbone connection is difficult and backbone connections using alternative radio or copper transfer systems have to be applied in some cases. Alternative systems have lower transfer rates than optical transfer systems, hampering the provision of three-play services; as a result, the main emphasis is placed on the construction of backbone optical connections.
At the end of the first quarter of 2008, the Telekom Slovenije network included more than 264 thousand xDSL connection points, and network occupancy exceeded 75 per cent. Modules enabling xDSL capabilities have been set up at 666 locations, in 605 of which IPBAN equipment was installed.
In the first quarter of 2008 we continued with the utilisation of VDSL2 capacities at locations where interest was demonstrated by sales. The network has been upgraded with VDSL2 technology at more than 269 locations, at two of which FTTB functionality has been installed. 7900 VDSL2 ports have been installed, and the utilisation rate is around 50 per cent. Testing of VDSL2 continues, aiming towards implementation of self- defined PSD masks.
On 12 February 2008, commercial marketing of the service began in the area of the radio access system WIMAX. 12 base stations are currently active in the network, with 19 users connected to them.
15 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Backbone elements
During the first quarter, the company prepared technical solutions for the Internet, an alternative to the existing TUS system users, cost-assessment and the method for connecting to the new system. Testing on the WH and SW platform is being prepared for L2. Preparation of the network for operation is at full redundancy along with the possibility of providing all services, including backhauling for the TDM council where this proves necessary.
Supervisory and support systems
In the area of supervisory and support systems, the project of IP/MPLS and CATVoverFTTH supervision has been completed along with a takeover. Within the Inventory projects, initial training was provided for users and data entry staff, while analysis and cleaning of current data is continuous. In the GIS Network Engineer project, a specification was prepared for upgrading the product for the purpose of preparation of project documentation, including automatic scheme generation. Furthermore, rules for integration of GIS and Inventory systems were defined.
10.4.2 Mobile network
At the end of the first quarter of 2008 the mobile network had 878 operational GSM base stations at the 900 MHz frequency band and 98 base stations at the 1800 MHz frequency band. During the same period, the UMTS network had 565 operational base stations. Six new base stations were connected to the GSM network in the first quarter, and the same number of new base stations was connected to the UMTS network. Additionally, 17 new cells were connected to the GSM network (over 1,100 in total in both frequency bands) and 14 to the UMTS network (out of a total of 1,503 cells).
By the end of the first quarter of 2008, 91% of base stations in the GSM network had been upgraded to EDGE, while 99% of base stations in the UMTS network had been upgraded to HSDPA.
Development of the network in terms of new base stations slowed in line with planned activities. Recently, Mobitel has been paying more attention to the upgrading of existent base stations with EDGE and HSDPA technologies. This is also reflected in completed data traffic, with more than 75% of data traffic in the 2G technology conducted using EDGE technology, and less than 25% using GPRS technology. Even more encouraging is the share of data traffic in 3G technology, with more than 85% of the data traffic in the 3G technology conducted using HDSPA technology and less than 15% using UMTS R99 technology. It has to be emphasized that overall data traffic is growing by about 30% per month. This means that the Mobitel network has to be upgraded in all segments of the mobile network – radio network, transfer between radio network and core network as well as in the core network.
In the first quarter of 2008, Mobitel d.d.: - Began implementing projects to upgrade its services (e.g. Integral, M-certificate); - Continued with the introduction of SAP R3; - Continued to establish a central monitoring system for information infrastructure equipment; - Brought to the final stage the project of accounting system consolidating; - Completed investments begun last year to upgrade the mobile Planet and MMS centre.
10.4.3 Network and service development in Kosovo
From the outset, the Ipko mobile telephony strategy was aimed at network quality and full geographical coverage of Kosovo before offering commercial services; even so, the mobile network in Kosovo is one of the most rapidly built mobile networks in Europe. Base stations and all basic building blocks of the network have additional electricity supply secured with generators so that any blackouts, which are common in Kosovo due to the shortage and reductions of electricity, do not affect the operation of the network and provision of services of mobile telephony. Despite this, Ipko is developing the coverage of individual inaccessible areas and has so far this year already constructed 43 new base stations and has upgraded the network capacity to 750,000 users. Total number of base stations on 31 March 2008 equals 144.
16 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
GSM signal coverage of Kosovo
In the fixed part of business operation, activities are still aimed at expanding the network in order to provide broadband services. In the access network, capacity in eight towns has been increased by 10 thousand ports in the first quarter, and projects have already begun to expand the hybrid optical-coaxial network with potentially 15 thousand new ports.
Due to the growing number of broadband users and the increasing need for bandwidth, Ipko extended its capacities with a 6 x 155 Mbit/s connection to Telekom Srbije. Future upgrades and capacity expansions are set to operate via the infrastructure of Kosovo railways and along the main road network.
Construction of the backbone optical network is still underway; this will connect all main towns and cities where Ipko provides broadband services, allowing new and better-quality services and unification as a single network. Network construction activities have been postponed pending final results of the tender of Kosovo railways for the use of their optical infrastructure, which would also be the most cost-effective solution. Nevertheless, all necessary documentation is already being prepared for the start of construction of the optical network along main roads and paths.
10.5 Key operating highlights of individual companies in the group
10.5.1 Telekom Slovenije, d.d.
in thousand EUR I-III 2007 I-III 2008 Index 08/07 Operating revenues 95,773 100,802 105 Net sales revenues 95,173 100,357 105 Other operating revenues 600 445 74 Operating expences 80,516 88,675 110 OPEX - operating expences before depreciation 60,092 66,115 110 EBITDA 35,681 34,687 97 Depreciation 20,424 22,560 110 EBIT- Operating profit 15,257 12,127 79 Net financial revenues/expenses -405 339 neg. Income tax 3,992 2,667 67 Net profit 10,860 9,799 90 EBITDA margin 37.3% 34.4% 92 Profit margin 11.3% 9.7% 86
During the first three months of 2008, business revenues grew in Telekom Slovenije d.d. Growth is comparable to most European operators, which have seen falling revenues in the fixed telephony segment for several years in a row.
Due to market saturation, the impact of competition and falling traffic, revenues from classic telephone connections fell by 11 per cent (compared to I-III 2007) due to fewer PSTN users and basic ISDN connections, lower sales of new connections, lower traffic, and also in part lower subscription charges (effective 1 February 2008) arising out of the APEK decision.
17 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
In the structure of all business revenues the importance of broadband services increased in the first quarter of 2008 compared to the same period of the previous year (Ind. 08/07=112), along with international operator services (I=135), network interconnections (I=121), bandwidth allocation (I=111) and value added services (I=127). Growth of operator revenues derives from significantly higher international transit traffic. Revenues from network interconnections have risen due to rising international traffic for other operators and traffic between networks in Slovenia, as user numbers in Slovenian operators’ networks is growing. Revenues from broadband have also grown, as have those from unbundled access due to new connections and more users, bandwidth allocation and collocations. In sales of bandwidth allocation and VPN, revenues from the household leased lines, elastic network and ATM are declining, while revenues from optical and VPN networks are increasing. Revenues from value added services are also growing.
Fixed telephony services
The number of classic telephone connections continued to fall in the first quarter of 2008. In PSTN services, the number decreased due to migration to connections of other operators (mobile and VoIP) and to fully unbundled access; for ISDN, the decline was also a result of unbundling or ADSL access via ISDN connections.
Changes in the number of connections of end users – voice telephony
31.3.2007 31.3.2008 Index 08/07 Residential users 513,303 446,118 87 Business users 268,013 265,223 99 Total 781,316 711,341 91
Traffic in minutes
Compared to the same period of 2007, the volume of outgoing traffic from classic residential telephone connections fell due to a smaller number of connections and declining national traffic and dial-up Internet access. With an almost identical number of connections, a decrease in traffic of 12 per cent has been recorded for business users. in mio minutes I – III 2007 I - III 2008 Index 08/07 Residential users 333.9 262.3 79 Business users 207.1 181.3 88 Total 541.0 443.6 82
Average revenue per line and user in the fixed network
ARPU business users
In addition to the decrease in traffic, the cut in subscription charges from 1 February 2008 also had an impact, with PSTN subscriptions falling and those for ISDN BA growing.
in EUR per connection I – III 2007 I – III 2008 Index 08/07 Total voice telephony 25.63 23.84 93 in EUR per number I – III 2007 I – III 2008 Index 08/07 Total voice telephony 9.77 9.13 93
ARPU residential users
in EUR per connection I – III 2007 I – III 2008 Index 08/07 Total voice telephony 18.90 17.29 91 in EUR per number I – III 2007 I – III 2008 Index 08/07 Total voice telephony 15.77 14.53 92
18 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Prices
On 1 February 2008, telephone subscription rates were changed according to the price-capping system, which sets subscription charges at inflation, corrected for X factor, as determined by APEK; starting prices are also regulated. The estimated impact of all these changes is a fall in revenues of 1.9 million euros, although the actual impact will be different, depending on the changes in the number of connections.
On 1 March 2008, prices for outgoing calls from Telekom Slovenije networks to mobile networks were also cut by approximately 17 per cent, since last year APEK lowered the price of terminating calls for mobile operators.
Broadband services
Despite an exceptionally competitive broadband market in Slovenia, the number of broadband connections increased by 17% year-on-year. The share of access without TDM telephone connections is rising along with the number of VoIP (100% growth in the year to March 2008) and IPTV connections (126% growth in the year to March 2008). Cable network connections are sold in packages and individually at FTTH access, with the number of connections at the end of March 2008 standing at 1,773.
Number of broadband connections- end users
31.3.2007 31.3.2008 Index 08/07 Broadband connections 154,839 181,258 117 xDSL without TDM 9,979 39,740 398 xDSL with TDM 144,860 137,237 95 FTTH 0 4,281 -
Average monthly revenue per xDSL connection
ARPL in EUR I-III 2007 I-III 2008 Index 08/07 xDSL-ARPL – residential users 20.90 18.58 89 xDSL-ARPL – business users 46.25 39.64 86
The ARPU of xDSL services is higher for business users than for residential users. The main reason for the lower ARPU compared to the previous year is that users of old xDSL packages with higher subscription charges than current services are migrating to new and cheaper Telekom Slovenije packages or are – at a faster rate than other users – cancelling xDSL connections.
Wholesale (inter-operator business)
In the inter-operator market, the first quarter of 2008 saw 24% growth in revenues compared to the same period the previous year. The increased revenues can be attributed primarily to services of fully unbundled access, network interconnections with operators, international operator services and collocation services.
Broadband accesses - wholesale 31.03.2007 31.03.2008 Index 08/07 xDSL WS 21,698 19,588 90 xDSL SRD 14,010 22,292 159 PRD 20,939 41,207 197 Total 56,647 83,087 147
19 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
10.5.2 Mobitel, d.d.
Operating highlights
in thousand EUR I-III 2007 I-III 2008 Index 08/07 Operating revenues 100,742 108,386 108 Net sales revenues 100,469 108,157 108 Other operating revenues 274 229 84 Operating expences 83,285 83,964 101 OPEX - operating expences before depreciation 65,818 65,775 100 EBITDA 34,924 42,610 122 Depreciation 17,467 18,189 104 EBIT- Operating profit 17,457 24,422 140 Net financial revenues/expenses -1,512 -1,233 - Income tax 4,818 3,183 120 Net profit 11,128 17,392 156 EBITDA margin 34.7% 39.3% 113 Profit margin 11.0% 16.0% 145
Mobitel generated EUR 108.2 million in net sales revenues in the first quarter, 8 per cent more than the previous year. The bulk (59%) is revenues from subscribers, followed by prepay services (13%) and network interconnection (12%).
Traffic in minutes
Minutes I - III 2007 I - III 2008 Index 08/07 Total outgoing traffic – postpaid (000 min) 430,793 446,708 104 Total outgoing traffic – prepaid (000 min) 66,697 59,173 89 Total incoming traffic into Mobitel network (000 min) 106,374 133,037 125 Outgoing traffic – guest users in domestic network (000 min) 2,582 3,007 116
Number of network users
I - III 2007 I - III 2008 Index 08/07 Postpaid 751,095 761,830 101 Prepaid 517,881 485,241 94 Total 1,268,976 1,247,071 98
ARPU by type
ARPU in EUR/m onth I - III 2007 I - III 2008 Index 08/07 Postpaid 32 34 105 Prepaid 9 10 107 Total 23 24 108
AUPU in minutes/month I - III 2007 I - III 2008 Index 08/07 Postpaid 191 195 102 Prepaid 43 41 95 Total 131 135 103
Roaming
As at 31 March 2008, Mobitel users were able to roam in networks of other providers: • GSM: 323 operators in 182 countries; • GPRS: 174 operators in 92 countries; • UMTS: 63 operators in 35 countries.
20 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
In the Slovenian market, Mobitel is successfully introducing quad-play, a comprehensive bundle of telecommunication services consistent with the strategy of introducing advanced convergence services in the Telekom Slovenije Group. The offer – marketed under the M4 brand – includes Mobitel GSM/UMTS, broadband SiOL internet, SiOL telephony and SiOL TV. Users receive a single Mobitel invoice for these services.
10.5.3 Ipko, d.o.o.
By the end of 2007, Ipko had already taken a major step towards becoming a comprehensive provider of telecommunication services in Kosovo with its mobile telephony service; revenues of 5.67 m euros in the first quarter of 2008 provide further evidence of this. Given such business dynamics, the company is well on its way to a positive EBIT as early as the end of this year.
Compared to the same period last year, revenue growth was marked by growth in broadband revenues and especially mobile telephony, where first-quarter revenues were just under 4 million euros. At present, other services represent a small part and in future, revenue growth is expected mainly in the area of fixed telephony, where great demand is expected for the commercial provision of international calls due to the number of Kosovans in other countries.
Structure of sales revenues in thousand EUR I-III 2007 I-III 2008 Index 08/07 Mobile telephony - 3,947 - Broadband access 1,223 1,595 130 Data transffer - 121 - Fixed telephony, VoIP - 3 - Wholesale – termination - 4 - Other 39 Total 1,262 5,670 449
Ipko sales and user numbers continue to grow rapidly: at the end of the first quarter of 2008, the company had over 200,000 mobile telephony users and more than 40,000 broadband users. The primary sales activities in the first part of the year were aimed at the sale and marketing of mobile telephony services, where Ipko can extend its sales centres to the whole of Kosovo. Most users use prepaid services, while most subscribers are business users.
By offering mobile telephony and preparing to offer fixed telephony, Ipko is becoming a comprehensive telecommunications provider in Kosovo, and is already planning to extend its services in the next quarter by providing GPRS and data packages as well as paid digital TV services. A substantial proportion of broadband sales involve the dual package with distribution of analog TV channels, which – due to the lack of regulation in this part of the market – users receive free of charge while Ipko does not pay anything for the related rights. With paid digital TV, Ipko aims to enhance the service portfolio and increase ARPU.
Number of users/minutes
I-III 2007 I-III 2008 Index 08/07 Mobile telephony – number of users - 204,536 - Mobile telephony - minutes (outgoing) - 15,183,020 - Broadband access – number of users 6,478 40,982 633
21 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
11 UNAUDITED FINANCIAL STATEMENTS for period January – March 2008
The consolidated financial statement for the Telekom Slovenije Group for the period January to March 2008 and the comparative figures for 2007 were prepared in accordance with International Financial Reporting Standards (IFRS). Interim consolidated statements and company statements do not contain all information and disclosures required for annual statements of account, therefore they should be read together with the statements of account of the Group and company for 2007.
The same accounting guidelines as last year have been used to prepare the financial statements of the Group and the company.
The financial statements for the period from January to March 2008 are unaudited.
The company does not have authorised capital or a conditional increase of capital.
The business of the Telekom Slovenije Group and Telekom Slovenije, d.d. is not seasonal.
11.1 Composition of Telekom Slovenije Group
The Telekom Slovenije Group consists of the parent company Telekom Slovenije d.d. and its subsidiaries:
Company 31 March 2008 Mobitel, d.d. 100% GVO, d.o.o. 100% Avtenta.si, d.o.o. 100% Teledat, d.o.o. 100% Soline d.o.o. 100% Planet 9, d.o.o. 100% On.Net, d.o.o., Macedonia, April 2006 83% Ipko d.o.o., Kosovo, June 2006 64% Blic net, BiH – Republic of Srpska, January 2007* 70% Interseek d.o.o., Slovenia, August 2007 75% Aneks,d.o.o., BiH – Republic of Srpska, January 2008 70% AOL SP, d.o.o.,Albania, February 2008 75%
* change from 100% to 70% on 25 January 2008
Gibtelecom was registered on 23 April 2007 as a jointly controlled company in the context of long-term financial investment using the capital method. Telekom Slovenije, d.d. owns a 50% stake in Gibtelecom.
22 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
11.2 Unaudited consolidated financial statements of the Telekom Slovenia Group
Consolidated Balance Sheet
31.12.2007 31.3.2008 Index in thousand EUR 1 2 2/1
ASSETS
Intangible assets 239,081 245,666 103 Property,plant and equipment 1,135,411 1,127,770 99 Investments in subsidiaries 37,675 38,123 101 Other investments 13,215 19,144 145 Other non-current assets 26,953 26,753 99 Real astete investments 5,715 5,905 103 Deffered tax assets 502 904 180 Total not-current assets 1,458,552 1,464,265 100
Non current assets held for sale 637 637 100 Invetories 25,224 28,092 111 Trade and other receivables 165,437 171,200 103 Income-tax receivable 1,667 2,589 155 Investments in securities 28,401 15,447 54 Cash and cash equivalents 60,607 33,525 55 Total current assets 281,973 251,490 89
1,740,525 1,715,755 99
EQUITY AND LIABILITIES
Issued capital 272,721 272,721 100 Reserves 294,379 295,641 100 Revaluation reserves 108,690 106,843 98 AFS securities revaluation reserve 920 479 52 Treasury shares -3,671 -3,671 100 Retained earnings 389,580 413,996 106 F/X differences arising froma foreign subsidiaries 5 5 100 117 172 147 Total equity 1,062,741 1,086,186 102
Non-current deffered income 7,255 7,458 103 Provisions 28,533 27,826 98 Interest bearing borrowings 273,729 262,186 96 Long-term liabilities 48,648 64,023 132 0 0 - Total non-current liabilities 358,165 361,493 101
Income tax liability 6,980 9,181 132 Current business liabilities 153,917 116,558 76 Interest-bearing borrowings 125,609 115,337 92 Other current financial liabilities 239 429 179 Deffered income 17,260 15,705 91 Accured expences 15,614 10,866 70 Total current liabilities 319,619 268,076 84 Total liabilities 677,784 629,569 93
Total equity and liabilities 1,740,525 1,715,755 99
23 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Consolidated Income Statement
in thousand EUR I-III 2007 I-III 2008 Index 1 2 2/1
Revenue 183,689 186,207 101 Other operating revenue 1,586 975 61 Total operating revenue 185,275 187,182 101
Share if income from joint ventures 0 1,285
Cost of goods sold 15,691 15,528 99 Cost of raw material nad consumables 3,962 2,316 58 Cost of services 53,637 47,517 89 Staff costs 35,003 36,507 104 Depreciation and amortisation expenses 38,703 44,998 116 Other operating expenses 5,061 5,663 112 Total operating expeses 152,057 152,529 100
Profit from operations 33,218 35,938 108
Finance revenue 1,606 2,057 128 Finance costs 3,614 5,204 144
Profit before tax 31,209 32,791 105
Income tax expense 8,331 9,141 110
Net profit for the year 22,878 23,650 103
Equity holders of the parent 22,850 23,595 Minority interest 28 55
24 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Consolidated cash flow Statement
in thousand EUR I-III 2007 I-III 2008 a) Profit before tax 31,209 32,791 b) adjustments for: Depreciation & amortization 38,703 44,998 Depreciation of investment property 56 51 Impairment & write off's of tangible & intangible assets 90 78 Profit from property,plant,equipment sale -410 -2,492
Financial expenses 3,625 5,204 Financial income -1,091 -2,057
Initial less final assets (group for disposal) for sale 319 0 Initial less final operating receivables -9,918 -5,763 Initial less final other long-term assets 0 10 Initial less final inventories -3,004 -2,868
Final less initial provisions -8,187 -707 Final less initial deferred revenues -8,312 -1,352 Final less initial accrued costs -5,311 -4,748 Final less initial operating debt -961 -9,911
Income tax -8,331 -8,330 c) Net operating cash flow 28,477 44,904 a) Receipts from investing activties 49,458 7,525 Receipts from assets disposal 5,561 4,234 Dividends received 0 107 Interests received 378 784 Receipts from investment property disposal 0 0 Receipts from long-term financial liabilities disposal 0 2,400 Receipts from short-term financial liabilities disposal 43,519 0 b) Expenditures for investing activities -108,695 -58,664 Expenditure for acquisition of tangible fixed assets -23,492 -35,246 Expenditure for acquisition of intangible assets -9,218 -10,644 Expenditure for acquisition of investment property 0 -241 Expenditure for acquisition of long-term financial liabilities 0 0 Expenditure for campany acquisition -1,290 -8,183 Expenditure for loans given -74,695 -4,350 c) Net cash used in investing activities -59,237 -51,139 a) Receipts from financing activities 60,401 8,249 Receipts from paid in capital 0 7,395 Receipts from treasury share sale 0 0 Receipts from increased long-term financial liabilities 0 850 Receipts from increased short-term financial liabilities 60,401 4 b) Expenditures for financing activities -5,825 -29,096 Treasury shares purchase 0 0 Expenditure for short-term financing liabilities repayment 0 -4,339 Expenditure for long-term financing liabilities repayment -2,309 -18,439 Interests paid -3,516 -6,294 Dividends paid 0 -24 c) Net cash used in financing activities 54,576 -20,847
Net increase in cash and cash equivalents 23,816 -27,082
91,888 33,525 Cash and cash equivalents at the beginning of period 68,072 60,607
25 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Consolidated statement of changes in equity
Issued Revaluation AFS securities Treasury Retained Consolidated Total attrib. Minority in thousand EUR capital Reserves reserves revaluation reserve shares earnings equity adjust. to the parent interest Total
1.1.2008 272,721 294,379 108,690 920 -3,671 389,580 5 1,062,624 117 1,062,741
Deffered tax assets 2 2 2 Transfer to retained earnings 1,262 -1,849 587 0 0 Swop -441 -441 -441 Total income and expense recognised in equity 0 1,262 -1,847 -441 0 587 0 -439 0 -439 Net profit for 1 Q 2008 23,595 23,595 55 23,650 Total income and expense for the year 0 1,262 -1,847 -441 0 24,182 0 23,156 55 23,211 Other 234 234 234 31.3.2008 272,721 295,641 106,843 479 -3,671 413,996 5 1,086,014 172 1,086,186
Issued Revaluation AFS securities Treasury Retained Consolidated Total attrib. Minority in thousand EUR capital Reserves reserves revaluation reserve shares earnings equity adjust. to the parent interest Total 01.01.2007 272,721 289,336 91,883 295 -3,671 338,693 15 989,271 0 989,271
Correction of taxes 14 14 14 Swop 155 155 155 Difference in exchange rate -449 -449 -449 Total income and expense recognised in equity 0 0 0 0 0 169 -449 -280 0 -280 Net profit for 1 Q 2007 22,850 22,850 22,850 Total income and expense for the year 0 0 0 0 0 23,019 -449 22,570 0 22,570 Other 266 266 266 31.3.2007 272,721 289,336 91,883 295 -3,671 361,978 -434 1,012,107 0 1,012,107
Notes on items in financial statements
The net profits of the group in the first three months of this year stood at 23.7 million euros, 3% higher than the same period of the previous year.
In the first quarter of 2008, the Telekom Slovenije Group increased operating revenues by 1.9 million euros compared to 2007, for a total of 187.2 million euros. Net sales revenues amounted to 186.2 million euros, a 1% rise on the previous year.
Operating expenses reached 152.5 million euros, the same level as the previous year.
Earnings before interest and taxes (EBIT) were 35.9 million euros, 8% up on the first quarter of 2007. This increase was due to growth in operating revenue and Gibtelecom profits on the one hand, and to the fact that costs were kept to the same level as in 2007 on the other.
EBITDA reached 80.9 million euros, an increase of 9 million euros (13%) from the same period of the previous year, 9% more than planned for this period.
The EBITDA rate was 43.2%, 4.4 percentage points higher than the previous year.
Net financial profit in comparison with the previous year shows an increase in interest rates for additional borrowing in connection with expansion of operations.
The balance sheet total on 31 March 2008 amounted to 1,716 million euros.
Long-term assets , which represent an 85 percent share of the Group’s assets, rose by 5.7 million euros in 2007 to 1,464 million euros. The increase in long-term assets in comparison with the beginning of the year is the result of financial investments, mostly due to loans provided to Ipko partners, which amounted to 4.3 million euros.
The 11 percent decrease in current assets , which on 31 March 2008 amounted to 251.5 million euros, was primarily influenced by the decrease in short-term financial investments by 13 million euros, and cash and cash equivalents in the amount of 27 million euros.
The value of capital and reserves amounted to 1,086 million euros on 31 March 2008 and rose by 2 percent in comparison with the balance at the beginning of the year, or net first-quarter profit. 26 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Long-term liabilities in the amount of 361.5 million euros represent a 21 percent share in the structure of the balance sheet total and have grown by 3.3 million euros, or one percent in comparison with the balance at the beginning of the year; in relation to this amount, other long-term liabilities have grown by 15.4 million euros and received loans decreased by 11.5 million euros.
Short-term liabilities represent a 16 percent share in the structure of the balance sheet total and have decreased to 268 million euros as at 31 March 2008, which represents a 16 percent decrease, primarily as a result of decreased short-term operating liabilities of 37.4 million euros, and the amount of received short- term loans decreased by 10.3 million euros.
27 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
11.3 Unaudited financial statements of Telekom Slovenije, d.d.
Balance Sheet
in thousand EUR 31.12.2007 31.3.2008 Index 08/07 1 2 2/1 ASSETS
Intangible assets 21,815 21,367 98 Property,plant and equipment 676,028 675,448 100 Investments in subsidiaries 307,617 327,037 106 Other investments 116,713 120,882 104 Other non-current assets 6,917 6,765 98 Real astete investments 14,461 0 0 Deffered tax assets 0 0 0 Total not-current assets 1,143,551 1,151,499 101
Non current assets held for sale 627 627 100 Invetories 8,732 9,679 111 Trade and other receivables 80,394 84,258 105 Income-tax receivable 1,636 2,586 158 Investments in securities 33,687 20,399 61 Cash and cash equivalents 13,112 12,694 97 Total current assets 138,188 130,243 94
Total assets 1,281,739 1,281,742 100
EQUITY AND LIABILITIES
Issued capital 272,721 272,721 100 Reserves 287,335 288,596 100
Revaluation reserves 103,543 101,696 98 AFS securities revaluation reserve 125 -27 -22 Treasury shares -3,671 -3,671 100 Retained earnings 200,195 210,583 105 Total equity 860,248 869,898 101
Non-current deffered income 7,229 7,458 103 Provisions 16,283 15,571 96 Interest bearing borrowings 130,430 124,491 95 Long-term liabilities 15,638 15,635 100 Deffered tax liabilities 3,856 3,470 90 Total non-current liabilities 173,436 166,625 96
Current business liabilities 104,165 91,712 88 Income tax liability 0 0 0 Interest-bearing borrowings 130,254 140,584 108 Other current financial liabilities 0 211 0 Deffered income 8,935 8,648 97 Accured expences 4,701 4,064 86 Total current liabilities 248,055 245,219 99 Total liabilities 421,491 411,844 98
Total equity and liabilities 1,281,739 1,281,742 100
28 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Income statement
in thousands EUR I-III 2007 I-III 2008 Index 08/07
Revenue 95,173 100,357 105 Other operating revenue 600 445 74 Total operating revenue 95,773 100,802 105
Cost of goods sold 3,522 5,141 146 Cost of raw material nad consumables 2,073 1,927 93 Cost of services 34,501 38,125 111 Staff costs 19,352 20,163 104 Depreciation and amortisation expenses 20,424 22,560 110 Other operating expenses 644 759 118 Total operating expeses 80,516 88,675 110
Profit from operations 15,257 12,127 79
Finance revenue 816 3,502 429 Finance costs 1,221 3,163 259
Profit before tax 14,852 12,466 84
Income tax expense 3,992 2,667 67
Net profit for the year 10,860 9,799 90
29 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Cash flow Statement
in thousand EUR I-III 2007 I-III 2008 A. Opearating cash flow a) Profit before tax 14,852 12,466 b) adjustments for: Depreciation & amortization 20,424 22,560
Depreciation of investment property 56 19 Impairment & write off's of tangible & intangible assets 70 72 Profit from property,plant,equipment sale -92 -2,434 Profit from investment property sale -1,066
Financial expenses 1,123 3,163 Financial income -816 -3,502
Initial less final assets (group for disposal) for sale 68 0 Initial less final operating receivables -8,551 -4,814 Initial less final receivables for deferred taxes 0 Initial less final other non-current assets -101 14,613 Initial less final inventories -805 -947
Final less initial provisions 57 -712 Final less initial income tax liabilities 0 Final less initial deferred revenues 28 -58 Final less initial accrued costs -813 -637 Final less initial operating debt -1,932 -11,882 Final less initial deferred liabilities for taxes 0
Income tax -3,396 -4,409
c) Net operating cash flow 20,172 22,432
B. Cash flow from investing activities a) Receipts from investing activties 4,774 43,006 Receipts from assets disposal 2,792 4,234 Dividends received 0 107 Interests received 200 203 Receipts from investment property disposal 0 16,062 Receipts from long-term financial liabilities disposal 0 2,400 Receipts from short-term financial liabilities disposal 1,782 20,000 b) Expenditures for investing activities -105,752 -53,071 Expenditure for acquisition of tangible fixed assets -20,556 -20,723 Expenditure for acquisition of intangible assets -8,349 -810 Expenditure for acquisition of investment property 0 0 Expenditure for acquisition of long-term financial liabilities 0 0 Expenditure for campany acquisitions -1,290 -21,188 Expenditure for loans given -75,557 -10,350
c) Net cash used in investing activities -100,978 -10,065
C. Cash flow from financing activities a) Receipts from financing activities 69,655 0 Receipts from paid in capital 0 0 Receipts from treasury share sale 0 0 Receipts from increased long-term financial liabilities 9,971 0 Receipts from increased short-term financial liabilities 59,684 0
b) Expenditures for financing activities -1,123 -12,784 Treasury shares purchase 0 0 Expenditure for short-term financing liabilities repayment 0 -4,171 Expenditure for long-term financing liabilities repayment 0 -5,939 Interests paid -1,123 -2,669 Dividends paid 0 -6 c) Net cash used in financing activities 68,532 -12,785
Net increase in cash and cash equivalents -12,274 -418
Č.Cash and cash equivalents at end of period 28,343 12,694 Cash and cash equivalents at beginning of period 40,617 13,112 30 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Statement of changes in equity
2008 Issued Revaluation AFS securities Treasury Retained in thousand EUR capital Reserves reserves revaluation reserve shares earnings Total 1.1.2008 272,721 287,335 103,543 125 -3,671 200,195 860,248 Deffered tax liabilities 2 2 Change in fair value of financial instruments -152 -152 Total income and expense recognised in equity 0 0 2 -152 0 0 -150 Net profit 9,799 9,799 Total income and expense for the year 0 0 2 -152 0 9,799 9,649 Transfer to retained earnings 1,261 -1,849 589 1 31.3.2008 272,721 288,596 101,696 -27 -3,671 210,583 869,898
2007 Issued Revaluation AFS securities Treasury Retained in thousand EUR capital Reserves reserves revaluation reserve shares earnings Total 1.1.2007 272,721 282,292 91,883 184 -3,671 153,208 796,617 Net profit 10,860 10,860 Total income and expense for the year 0 0 0 0 0 10,860 10,860 Other 30 30 31.3.2007 272,721 282,292 91,883 184 -3,671 164,098 807,507
Notes to the items in the financial statements
Telekom Slovenije increased operating revenues by 5.3% on the previous year to 100.8 million euros. Operating costs reached 88.7 million euros, 10.1% higher than in the first quarter of the previous year.
EBITDA (earnings before interest, tax, depreciation and amortisation) fell by 2.8% in comparison to the first quarter of the previous year, while EBITDA as a proportion of operating revenues fell from 37.3% to 34.4%.
In the first quarter of 2008, operating revenues (earnings before interest and taxes - EBIT) were 12.1 million euros, 20.5% lower than in the same period of the previous year. EBIT represented 12.0% of operating revenues, and its share in revenues decreased in comparison with the first quarter of previous year by 3.9 percentage points.
The corporation tax amounted to 2.7 million euros, just over one-third less than in the same period of the previous year.
In the first quarter of 2008, the net profit of Telekom Slovenije d.d. (including SiOL) amounted to 9.8 million euros, a drop of 9.8% from the same period of the previous year.
The balance sheet total as of 31 March 2008 was 1,282 million euros, which is at the level of 2007.
Long-term assets , which represent a 90 percent share of the company’s assets, have risen by one percent to 1,152 million euros since 31 December 2007.
The increase in long-term assets in comparison with the beginning of the year is the result of: • Greater financial investments in subsidiaries in the amount of 19.4 million euros, due to: - Investment in a 70 percent share of Aneks in the amount of 5.7 million euros; - Purchase of AOL SP for 2.5 million euros; - Injection of equity capital into the Ipko.net company in the amount of 13 million euros; - Reduction of investment in the Blic.net company by 1.8 million euros; • Larger other financial investments as a result of: - Providing a long-term loan to partners of the Ipko.net company in the amount of 4.3 million euros; - Reduction in consumer credit to Tk users and housing loans to employees in the amount of 0.2 million euros.
The 6 percent decrease in current assets , which on 31 March 2008 amounted to 130.2 million euros, was primarily influenced by the decrease in short-term financial investments by 13.3 million.
The value of capital and reserves amounted to 869.9 million euros on 31 March 2008, a rise of 1 percent in comparison with the balance at the beginning of the year, or net first-quarter profit.
31 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
Long-term liabilities of 166.6 million euros represent a 13 percent share in the structure of the balance sheet total and have decreased by 6.8 million euros in comparison with the balance at the beginning of the year; of this, an amount of 5.9 million euros is attributable to the decrease in received long-term loans.
Short-term liabilities represent a 19 percent share in the structure of the balance sheet total and have decreased to 245.2 million euros as at 31 March 2008, which represents a 1 percent decrease, primarily as a result of decreased short-term operating liabilities and previously imputed costs in the amount of 13 million euros, and an increase in short-term loans by 10.3 million euros.
12 SIGNIFICANT EVENTS AFTER THE ACCOUNTING PERIOD
April
Telekom Slovenije, d.d. received the resolution determining the abuse of the dominating market position by bundling ISDN and ADSL from the Competition Protection Office. On 1 April 2008 Telekom Slovenije d.d. received a ruling and resolution from the Competition Protection Office finding that between 17 January 2001 and 5 September 2005 Telekom Slovenije abused its dominant position on the inter- operator market for ADSL broadband access, by unjustly imposing an additional condition at installing an ADSL connection. Telekom Slovenije d.d. will study the Competition Protection Office’s ruling, and will make a decision on its subsequent actions on this basis.
BH Telecom Management Visited Telekom Slovenije. Following the invitation by the President of the Telekom Slovenije Management Board Mag Bojan Dremelj, the Telekom Slovenije and BH Telecom management boards, the latter led by deputy CEO Nedžad Rešidbegovi č, met in the middle of April. The talks were conducted especially in light of the mutual interests in cooperating in the field of infrastructure and ensuring state-of-the-art and advanced telecommunications services. The talks between both management boards also touched upon the planned privatisation of BH Telecom.
Successful presentation of Telekom Slovenia Group at the conference in Zuers. Telekom Slovenia Group participated at the Annual Investor conference, which took place in Zuers, Austria between 9. and 12. April 2008. More than 100 investors, mostly from the Europe, attended the conference, which was organized by the Raiffeisen Centrobank.
Ipko - A Quarter of a Million SIM cards in Kosovo. Precisely four months since the launch of the second GSM mobile network in Kosovo, iPKO - the subsidiary of Telekom Slovenije in Kosovo – has already sold 250,000 SIM cards. In cooperation with the Telekom Slovenije Group consortium, iPKO has set up 150 base stations in Kosovo so far, its signal covering all larger towns and the main traffic routes. This amounts to 76 per cent of the population and 52 per cent of the territory.
The Supervisory Board discuss the future organisational structure of the Telekom Slovenia Group . The entire focus of meeting of Telekom Slovenije's Supervisory Board on 18 April was on the review of the future organisational structure of the Telekom Slovenia Group. Members of the Supervisory Board agreed that it was necessary to speed up reorganisation activities due to increased pressure from the competition and market conditions. In this regard, the participation of external consultants with experience in mature markets can be extremely useful. The Management Board therefore invited one of the largest international consultancy companies, Boston Consulting Group, which presented its credentials regarding the creation of pioneering examples of organisational models for the Switzerland-based Swisscom and the Dutch KPN.
Mobitel successfully implemented the 3.5 generation of mobile telecommunications in Slovenia Mobitel, a Telekom Slovenije d.d., 100-percent owned subsidiary, has successfully implemented the 3.5 generation of mobile telecommunications in Slovenia. Its UMTS network is fully upgraded with the HSDPA 7.2 Mbps and HSUPA 1.4 Mbps. The megabit mobile internet is now available to almost 73 percent of the population.
Mobitel receives lawsuit from Colja, Rojs in partnerji solicitors. Mobitel, a Telekom Slovenije subsidiary (100 percent) received a lawsuit from Colja, Rojs in partnerji solicitors, for payment of EUR 4,710,066.00 for soliciting services for representation in the Western Wireless International case in 2006. Mobitel will reply to the lawsuit in the legally proscribed time frame, and will use all legal means in the process to prove the claim is unjustified.
32 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694 Unaudited business report for January – March 2008
May
Telekom Slovenije, d.d. gains a 50% share of Planet 9 d.o.o. through a capital increase. The annual general meeting of Planet 9, d.o.o. agreed to a capital increase of EUR 4,556.76 by Telekom Slovenije, d.d., which had already been among the company’s owners. Mobitel, d.d., the majority stakeholder, renounced its right to a capital increase in the proportionate share. Telekom Slovenije, d.d. thus increased its share in Planet 9, d.o.o. from 24% to 50%.
Telekom Slovenije, d.d. receives a lawsuit from Amis d.o.o. On 20 May 2008 Telekom Slovenije, d.d. received a lawsuit from Amis d.o.o. for the payment of reparations in the amount of EUR 56,824,674.75 due to alleged abuse of the dominant market position in the sense of Article 10 of Prevention of Restriction of Competition Act and violations of Post and Electronic Communications Agency of the Republic of Slovenia decisions in the inter-operator broadband access market, in the unbundled local loop and sub-loop access market, in the fiber-optics connections to collocations spaces market and regarding price scissoring. Telekom Slovenije, d.d. will respond to the lawsuit in the legally required time, and estimates that the lawsuit is completely groundless, because Telekom Slovenije, d.d. fully observes the valid legislation and the decisions issued by the Post and Electronic Communications Agency of the Republic of Slovenia, and conducts business in accordance with good business practices.
33 . WorldReginfo - b3d307dc-6c66-45dc-b3ed-6ae9e450d694