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Telekom Slovenije, a state-owned telco group that includes Mobitel, Slovenia's largest mobile telecommunications operator, and SiOL, the country's dominant Internet services provider (ISP), along with its traditional fixed-line businesses, is certainly among one of the most coveted targets. Not just because there are so few left in this part of Europe, but because the group posted a net profit of EUR 96.8 m for 2005, up 55% from the previous year, and enjoys a practically unassailable position on the national telecommunications market. The government began mulling over the privatisation of the group as far back as 2000, but prudently decided to wait for the debt burdens of possible foreign buyers to fall back to sustainable levels. Not only has this decision allowed the government to expect a better price for its 'jewel in the crown', it also gave it time to establish a regulatory environment conducive to competition. The sell off itself will not create a 'more efficient market structure and allow for the interplay of market forces, thus benefiting the consumer', as it is often claimed - after all, what is the use of exchanging a government-owned monopoly for a privately-owned one? However, it seems that the government, to the consternation of some self-styled liberal economists, does not want to relinquish control over its cash cow just yet. Given that the state directly or indirectly owns 74.1 % of Telekom and that the telco will distribute EUR 34 m in dividends to its shareholders this year, this is more than understandable, but less so is the proposal that the government sell the profitable mobile division only. As some observers have pointed out, such a decision would hurt Telekom's profits as well as potentially leaving the government with a loss-making company on its hands. Last month, the government finally decided to put an end to these debates. On 11th May, it unveiled its plan for Telekom's privatization, which addressed the aforementioned issues as well as concerns regarding the undue influence a successful foreign bidder could gain over the Slovenian telecommunications market. Most importantly, the government announced that 25% plus one share of the group would remain in state hands, 10% would be offered to domestic investors, while the remaining 39% stake would be sold to a strategic partner. Government representatives stressed that they were not on the lookout for a financial investor, but rather a company with a long-term interest in developing the Telekom group, which, for precisely this reason, will be sold as a whole. It would appear that the Slovenian government has been shrewd enough to draw upon the experience of its southern neighbour. The Croatian government sold the national telco to Deutsche Telekom (DT) only to see the latter abuse its dominant position by imposing unwarranted price hikes upon its Croatian consumers. To alleviate concerns that something similar might happen in Slovenia, the government has decided to float its stake on the Ljubljana Stock Exchange and thus increase the transparency of the sale. The listing will be immediately followed by the sale of 5% of the parcel to domestic investors, while a further 25% would be offered to a foreign investor in the first half of 2007. Rumours have it that Spain's Telefonica and Germany's DT have expressed an interest in entering the Slovenian market. In any case, whoever gets to buy the first 25% is entitled to buy a further 14% three years later. How much public debt the government will be able to retire as a result remains to be seen. Let's just hope that the continuing role of the government in the company's strategic decision making will not put off too many potential bidders.