EMCC European Monitoring Centre on Change

Vega

Company/Organisation:
Vega

Geographic Location

Country: Slovenia
Region: Slovenija

Company

Sector: Information / communication
Telecommunications
61 - Telecommunications
Number Employed: 110
Group: Western Wireless International - Alltel

Employment Effects

Announcement Date: 20-04-2006
Planned Job Reductions min: 110
Planned Job Reductions max: 110
Type of Restructuring: Bankruptcy/Closure
Employment Effect Start: 20-04-2006
Foreseen End Date: 01-06-2006
Direct Dismissals: 110

Additional Information

The US company Western Wireless International – WWI (owned by Alltel) entered the Slovenian mobile telephone market in 2000 by establishing the company Vega. This was the third mobile operator in the country. The company never really achieved the planned market share; before the closing down it had only 12,000 subscribers and altogether about 30,000 customers. As a consequence, during all its lifetime, it never succeeded to come out of the red numbers. The reasons are manifold, the most important being: (a) the fact that Slovenian mobile telephone market has been rather saturated already at the time WWI entered the market, (b) the Slovenian legal framework in the field of mobile telephone, which has long been in favour of large existing operators (the largest still being in state ownership), (c) the fact that WWI did not offer any new products but only very standardised ones. As a consequence, WWI decided to terminate its operations in Slovenia. It sold its base stations to the other two Slovenian mobile telephony operators (Mobitel and Simobil), while all the 110 employees will lose jobs by June 1, 2006. Some of the employees already found new jobs. Vega claims that all the issues related to dismissals will be handled according to the legislation. Employees have been assured that the owner will pay all the legal liabilities (compensation for dismissal, vacation reimbursement) to the employees.