Serbia’s mobile telecommunications market is divided between three operators: about 46% of customers use the services of state-owned MTS, followed by Norway’s Telenor (32%), and VIP, a subsidiary of Telecom Austria, which holds 23% percent of market share. After a period of steady growth, the number of mobile subscribers has recently peaked to about 9.3 million, with total household mobile phone penetration at about 90.5%.

With increased market saturation, the competition between providers of wireless communication and digital content services is becoming fiercer and more expensive -  a situation that requires greater investment, but is creating some new and interesting opportunities.

Despite this situation, there remains the question of state-owned MTS. Traditionally under the political influence of the political elite, the trajectory of its future is bound to impact the nature of competition in the country’s telecommunications sector over the foreseeable future.

Impact

  • Following the successful privatisation of Serbia’s largest mobile telecommunications company, and the introduction of a third competitor, the market has been stable and growing for at least eight years.
  • Having reached a peak in number of subscribers, there has been little fluctuation in the market share of the three mobile operators. The quest for new consumers has turned into a competition in advanced services, resulting in more than 40,000 subscribers switching contracts between mobile operators annually – especially during the holiday season.
  • New, non-traditional players, are becoming increasingly interested to venture into the mobile internet market, but they are still put off by relatively high barriers to entry – the government-issued mobile license, and steep costs of the introduction of new technology. However, the question is not if, but when and how, their entry will happen.
  • The government-controlled Telekom Srbija (MTS), currently the country’s biggest mobile operator, has always been under strong informal political influence – a toxic practice that continues today. The company has been partially privatised and re-nationalised on several occasions. Its fate was most recently debated in 2016, when Aleksandar Vučić decided to shelve all privatisation plans and keep MTS in the government’s hands. At least for now.