Telekom Srbija, the large state-controlled telecommunications operator in Serbia, has announced its intention to acquire 18 local cable operators by 2027 as part of a market consolidation strategy.

The idea is to continue absorbing smaller regional and local cable/internet/wireless providers, so that Telekom becomes the dominant, perhaps even “default,” ISP / cable operator across Serbia and its neighbouring markets where it operates.

Telekom claims that this move is the logical culmination of a consolidation that began around 2018.

Who Are Some of the Target Companies

Some of the companies reportedly earmarked (or already in the process of being acquired) include:

• Nova Telnet Bezicne i Kablovske Telekomunikacije
• Media KDS
• MSAT Inženjering
• Link 016
• KATV
• Orion Telekom WiFi
• Beotelnet-ISP

Other smaller operators are also being discussed, especially in more rural or less competitive regions.

Financials & Market Position

• The seven operators listed in one report (Nova Telnet, Media KDS, MSAT etc.) collectively had revenues of 744.3 million dinars (~€6.4 million / ~$7.5 million) in 2024, with a net profit of 658,000 dinars. That’s an improvement versus 2023 when those same companies reported similar revenue (734.2 million dinars) but a net loss of 8.3 million dinars.
• Telekom Srbija already has considerable size: ~12 million users and ~€1.8 billion in annual revenues.

Why This Matters

Strategic Rationale

1. Economies of Scale – Acquiring multiple smaller cable operators can reduce duplication (e.g. overlapping infrastructure, staffing, maintenance), streamline operations, and improve bargaining power with content providers and equipment vendors.
2. Network Modernization & Digitalization – By bringing local cable networks under one roof, Telekom can more easily upgrade infrastructure (fiber, higher-speed broadband, better set-top equipment etc.), transitioning away from legacy systems. This is particularly important in rural or underserved areas. Telekom’s 2023 annual report already mentions investments in optical networks, rural broadband, modernization of signal equipment, etc.
3. Competitive Positioning – A more consolidated market means fewer small competitors. Telekom will be in a stronger position to compete with regional and international players, especially in broadband, TV, and bundled services.
4. Regulatory & Policy Alignment – Serbia, like many countries, is pushing for better internet coverage, digital inclusion, and infrastructure investment. This consolidation fits with national policy aims to reduce the digital divide. Also, acquiring operators must go through competition authorities, which offers some oversight.

Impacts for Various Stakeholders

• Consumers: Potential benefits include better service quality, wider availability (especially rural areas), faster broadband, possibly more unified billing or packages. On the other hand, reduced competition could lead to higher prices or less choice in some locales.
• Small Operators: For many of the small cable operators, this is likely an exit opportunity: a chance to sell to a major player rather than compete with it. But the terms of acquisition will matter (price, what happens to employees, local service etc.).
• Telekom Srbija: If successfully implemented, this will strengthen its dominance. But it will also require substantial integration work, investment in upgrading acquired networks, aligning service platforms, customer support, etc.
• Regulators: The Serbian Competition Authority and, in some cases, cross-border competition regulators need to ensure that this consolidation does not lead to monopolistic abuses, unfair price hikes, or reduced service quality. Monitoring will be essential.

Challenges & Risks

1. Integration Complexity
   Buying many small operators with heterogeneous infrastructure, technologies, billing systems, and service footprints means sizable integration costs, both technically and logistically.
2. Regulatory Scrutiny
   Competition authorities could impose conditions, require divestitures, or block certain deals if they believe the public interest or consumer welfare is at risk. Given that some of the targets are small, but potentially critical in certain regions, this could get complicated.
3. Financial Return on Investment
   Many of the smaller operators have low or negative profitability. For example, some of the target operators listed have negative EBITDA (i.e. not profitable before interest, taxes, depreciation etc.). The returns from upgrading their networks may be slow.
4. Customer Retention & Perception
   When a small local ISP is acquired, customers may fear price hikes, loss of local service, or decline in support quality. Telekom will need to manage these transitions carefully.
5. Infrastructure Investment Needs
   Some of the small operators may have aging infrastructure. To bring them up to high broadband or fibre standards will require investment, which may be large and not always immediately profitable.
6. Competition from Other Players
   Even with consolidation, Telekom still faces competition from other national and regional players, satellite, potential wireless broadband, etc. The success of this strategy depends not just on owning the local cable networks but making them competitive and attractive.

Broader Regional Context

• Telekom Srbija already operates in Bosnia and Herzegovina, Montenegro, and North Macedonia.
• In North Macedonia, the company has said it’d invest about €50 million over the next 2-3 years, including exploring acquisition of smaller cable operators there.
• The consolidation trend in telecom / cable is common globally — as broadband demands increase, economies of scale, fibre rollouts, and bundling TV/Internet/phone services drive M&A activity. Telekom’s moves are in line with wider regional patterns.

What to Watch Going Forward

1. Actual Deals vs. Announcements: It remains to be seen exactly which of the 18 operators will be acquired, at what price, and over what timeline. Public filings with the Serbian Competition Authority will shed light.
2. Regulatory Conditions: Will the acquisitions come with regulatory oversight to ensure service quality, pricing controls, or preservation of local operations?
3. Infrastructure Modernization Plans: How much investment will Telekom commit to modernizing the networks it acquires (e.g. upgrading to fibre, eliminating legacy coaxial networks, offering gigabit broadband, etc.)?
4. Impact on Rural/Remote Areas: Will the acquisitions lead to improvement in broadband access in rural / less well-served regions? Or will the focus remain on already commercially viable areas?
5. Consumer Reaction: Customer satisfaction surveys, prices of bundled services, and network performance will be important.
6. Competitive Response: How will other ISPs and cable operators respond? Could this lead to consolidation among the smaller players just to survive? Or competition via price/service differentiation (e.g. wireless, satellite)?
7. Financial Sustainability: Monitoring Telekom’s financial performance post-acquisition will be key—acquisition + integration costs + infrastructure upgrades can be capital intensive.

Conclusion

Telekom Srbija’s plan to acquire 18 cable operators by 2027 is a strategic push towards consolidating its position in the Serbian and regional telecommunications market. It aligns with broader imperatives—scaling up, modernizing infrastructure, and improving broadband availability, especially amid increasing user demand for high-speed internet and bundled digital services.

However, success is not guaranteed. The challenges of integrating diverse networks, ensuring regulatory compliance, preserving service quality, and obtaining acceptable returns will test whether this consolidation delivers the benefits Telekom promises.

For consumers, the hope is that this will result in better access, faster internet, more consistent service, and fair pricing. For the industry, this is a move to reshape the playing field. What remains to be seen is how the balance between efficiency, investment, and competition will be managed.