On 17 February 2008, Kosovo unilaterally declared its independence from Serbia. It has since gained diplomatic recognition as a sovereign state by 111 UN member states. Serbia refuses to recognize Kosovo as a state, although with the Brussels Agreement of 2013, it has accepted the legitimacy of its institutions. Kosovo’s economy has shown progress in transitioning to a market-based system and maintaining macroeconomic stability, but it is still highly dependent on the international community and the diaspora for financial and technical assistance.
The Internet penetration rate was over 85% by the end of 2018. Fixed telephony penetration rate remains one of the lowest in Europe with 45 per 100 and mobile-cellular is 31 per 100 persons, i.e. 4.48 lines per 100 inhabitants. Significant potential lies within the internet segment as the penetration of the service in the region remains at a low level. Therefore, the influx of new users on the market is fuelling the growth in value of the market.
The telecom sector has been liberalised. New regulations are aimed at fostering competition and encouraging the entry of new players in the market. Unlike most markets, the fixed-line broadband sector is dominated by newer companies, mainly subsidiaries of Slovenian telecoms. The mobile sector accounts for most telecom lines for voice services, as well as most of telecom revenue. Two MNOs dominate the sector. Broadband penetration in Kosovo is developing slowly. There is competition between the main cable and DSL operators, but progress is scarce in relation to the expansion of fibre networks. The Independent Media Commission (IMC) is responsible for the regulation of the broadcasting frequency spectrum in the Republic of Kosovo.
Kosovo’s citizens are the second poorest in Europe, with a per capita GDP (PPP) of $10,400 in 2017. Most of Kosovo’s population lives in rural towns outside of the capital, Pristina. Inefficient, near-subsistence farming is common – the result of small plots, limited mechanization, and a lack of technical expertise. Kosovo enjoys lower labor costs than the rest of the region. However, high levels of corruption, little contract enforcement, and unreliable electricity supply have discouraged potential investors. The official currency of Kosovo is the euro, but the Serbian dinar is also used illegally in Serb majority communities. Kosovo’s tie to the euro has helped keep core inflation low. While Kosovo’s economy continued to make progress, unemployment has not been reduced, nor living standards raised, due to lack of economic reforms and investment.
ACP Axos Capital consortium, working with its European and US investors, was selected in 2013 as the winning bidder for a 75% stake in Kosovo’s incumbent operator Post and Telecommunications of Kosovo (PTK). Under the privatisation plan, PTK’s headquarters have remained in Pristina, keeping its own corporate status. The consortium’s investments in PTK are expected to create infrastructure development and employment opportunities. As PTK evolves into a market driven competitive business, PTK customers expect to take advantage of an increased product portfolio, improved fixed and mobile broadband and voice options, international connectivity.
(None reported as of January 2018)