Reorganizing Moldtelecom’s property is necessary for privatization

In order to make Moldtelecom’s privatization successful, its assets need to be reorganized and reformed. This is the conclusion of former Communications Minister Ion Casian in an interview for Business Expert, quoted by Info-Prim Neo. Ion Casian says any formula of privatizing Moldtelecom should provide for restructuring and reorganizing its assets, as a first stage. According to him, if there is no talk about this, it means no privatization is actually wanted. The expert explains that privatizing means, first, reforming the state property into private property, what implicitly implies a series of actions, some of them revolutionary. According to the expert, there is a precedent today as to reorganizing and reforming property. He sets as an example the actions performed by TeliaSonera, Moldcell’s main stockholder, which was recently reorganized. Thus, TeliaSonera divided its “copper – optic fiber" infrastructure from all other services. This way, the separated entity sells infrastructure to all market operators, including to its entity. Ion Casian says this idea can be applied in the reorganization of Moldtelecom. According to the expert, after the division, as a first stage, the infrastructure can remain under state ownership, as it is national asset. But there can also be a mixed format: the state plus someone else. Also, the former minister maintains the infrastructure can be administered through the cooperation of all interested operators. It is essential to separate the service providing entity from the infrastructure. The reason is that a company managing the infrastructure should not provide services to clients. Its powers consist in selling wholesale infrastructure services to operators dealing with clients. In such a situation, there is a clear division between the infrastructure and service provision. Thus, the telephony operators on the market remain in equal conditions. The expert believes this would be the maximum target. Yet the reorganizing process cannot be segmented. At the first time, only the large cables can be separated, then the local distribution network or vice versa. Finally by reorganizing Moldtelecom this way, the privatization issue would be a mere technical matter, when the Government decides how to sell the formed parts. According to an agreement signed with the IMF, till the end of September 2008, the Government is to select an advisor, in a contest, who will evaluate the ways of privatizing the monopoly fixed telephony operator Moldtelecom. Later last year, Gheorghe Ursachi, Moldtelecom’s general manager, assessed its price at USD1 billion, as the operator had over 1 million subscribers.