The mobile telephony market continued to fuel the expansion of the Serbian telecom sector in the first quarter of this year.

The mobile telephony market continued to fuel the expansion of the Serbian telecom sector in the first quarter of this year. According to the latest figures of the statistical office, there was 57.5% y/y rise in the minutes in the mobile phone network in Q1 to 363,166. The increase is similar to the one recorded in the entire 2005, which was 57.8% y/y to 1,187,179 minutes. The rise is in line with the growing number of subscribers, which reached 5.22mn at the end of 2005 (according to figures from the statistical office) or up by the impressive 28.8% y/y. Our calculations, based on information from Telekom Srbija, show that mobile phone users rose by another 4.2% in the first five months of the year to 5.44mn as of May 31 corresponding to 72.6% penetration rate. Considering the expansion in the number of subscribers in Jan-May, we expect considerable moderation of the growth rate in the entire year. This, however, is hardly surprising taking into account the high base and the fact that at present there is only one operator in the country in practice (the network of Mobtel is administered by Telekom Srbija).