Regulation and Demonopolization of the Telecommunication Sector in Serbia

Telecommunication Sector in Serbia was a complete state monopoly until 1997. Partial privatization of Telekom Serbia in 1997 (Telecom Italia, 29 percent; OTE-Greece, 20 percent) prior to regulation of telecommunication sector resulted in replacement of public monopoly by private-public monopoly.

After the partial privatization of Telecom Serbia, the established public – private monopoly was even worse solution than public monopoly, as it resulted in permanent growth of prices, disinvestments and worsening of the quality of telecommunication services.
Until April 2003, when the Telecommunications Law came into force, this area was regulated by the obsolete Serbian Law on Communications, which did not correspond to the basic elements of modern EU legislation. The new Telecommunications Law, adopted in May 2003, was developed in line with the EU determining conditions and the ways of conducting operational activities.

However, the implementation of this law was not possible because the law contained a provision that provided that Telekom Serbia retains exclusive rights on the market until June 2005.

The purpose of this paper is to present the current unfavorable situation in the telecommunication sector in Serbia, and to give recommendations and conclusions on the necessary steps that have to be taken for the improvement of the existing situation