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Summary of contracts between Croatian government and DT published

ZAGREB, Jan 27 (Hina) - Three contracts signed by the Croatiangovernment and Deutsche Telekom (DT) in October 2001 which made DT theowner of 51 percent of the shares of the then Croatian Telecom (HT)cannot be made public in their entirety because they are considered abusiness secret, which is why a summary of the contracts was madeincluding the most relevant facts, the Minister of the Sea, Tourism,Transport and Development, Bozidar Kalmeta, said on Thursday.
ZAGREB, Jan 27 (Hina) - Three contracts signed by the Croatian government and Deutsche Telekom (DT) in October 2001 which made DT the owner of 51 percent of the shares of the then Croatian Telecom (HT) cannot be made public in their entirety because they are considered a business secret, which is why a summary of the contracts was made including the most relevant facts, the Minister of the Sea, Tourism, Transport and Development, Bozidar Kalmeta, said on Thursday.

The summary refers to the three contracts which define mutual rights and obligations between Croatia, DT and HT.

The contracts impose on Croatia a time framework restricting the issuing of UMTS licences. Only four such licences can be awarded, the last one four years after the start of operation of the first UMTS service in Croatia. This means that the next licence for UMTS service would be awarded only in 2009 because UMTS service was introduced in Croatia this year.

With regard to fixed telephony, the contracts confirm HT's monopoly to last until the end of 2004. Under the contracts, bids for the third mobile telephony licence could have been invited in early 2002, however, there is a clause banning the start of operation of the third mobile operator before 1 October 2003.

Asked whether DT had met its obligations regarding investments, Kalmeta said that this was being investigated, but that DT was bound to make 750 million euros worth of investments by the end of 2004. This includes the establishment of an UMTS network, which has been delayed, said state secretary Drazen Breglec.

In case the government decides to continue the privatisation of HT, the contracts envisage the right to pre-emptive buying by DT.

Minister Kalmeta would not comment on the contracts stating that he did not participate in their drafting. The contracts remain to be assessed by the Croatian public, he said.

He added that the incumbent government would honour its obligations from the contracts.

DT paid more than 1.35 billion euros into the budget to buy 51 percent of HT shares - the first time in 1999, when it bought the first 35 percent of shares at a price of 850 million US dollars, and in 2001, when it bought an additional 16 percent of shares for 500 million euros, Kalmeta said, adding that this was the biggest privatisation project in the region.

The incumbent government will demand that DT meet its obligations from the contracts and that HT be the generator of development in the Croatian telecommunications market more than it has been so far, he said.

The government will insist on the consistent mass-scale introduction of broadband access to the Internet, the realisation of investments which have not been made yet, the fulfillment of obligations towards workers and their training, and the defining of HT's position in the region, the minister said.

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