While Telekom Srbija has received positive assessments from credit rating agencies due to the stabilisation of its operations and its dominant market position, experts warn that the company survives thanks to massive borrowing and state backing.
Although Telekom Srbija’s financial report for 2025 has not yet been published, some information has emerged in recent days through statements issued by credit rating agencies.
According to a report by Fitch Ratings, Telekom ended last year with revenues of 213 billion dinars, or approximately €1.97 billion. The agency also states that this represents growth of 28.1 per cent compared with the previous year. The company’s EBITDA (earnings before interest, taxes, depreciation and amortisation), according to their figures, amounted to €1.3 billion, with growth of 51.3 per cent.
However, Telekom’s profit for 2025 is still unknown. What is known is that the company is planning new borrowing through corporate bonds amounting to almost €2 billion. In a statement by S&P Global Ratings it is stated that Telekom Srbija plans to secure a major new loan through a bond issue worth €1.95 billion, which effectively means that Telekom wants to borrow almost the same amount as the company’s total revenue last year. However, according to S&P, this money will not be used to finance new projects, but rather to repay old debts and cover refinancing costs.
Another important development is that all three credit rating agencies – Fitch Ratings, Moody’s Ratings S&P Global Ratings – have commented on Telekom’s credit rating. Fitch upgraded the company’s rating from B+ to BB-, while Moody’s maintained Telekom’s rating at B1 and S&P kept it at BB-.
Looking at the scale, Telekom has still not achieved investment-grade status. According to Fitch and S&P, the company remains in the “speculative credit rating” category, several levels below investment grade. With Moody’s, Telekom is placed one level lower still, in the “highly speculative” category, which carries greater risk for investors.
What else does Fitch’s report show?
In explaining the rating upgrade, Fitch states that Telekom will now face lower content costs because the multimedia market has undergone consolidation.
In simple terms, this means that the “war” between Telekom and United Group over sports broadcasting rights and television subscribers has ended, resulting in less money being spent on overpaying for sports rights and fighting competitors. According to the agency, this represents a major change, as this “war” had been the main reason behind Telekom’s enormous investments and excessive spending in recent years.
Fitch therefore believes that the market situation is stabilising and that Telekom will now be able to generate more profit while spending less. The agency also highlights that the company benefited from acquiring part of United Group’s media operations, which increased its multimedia market share from 55 to 62 per cent, brought in around 300,000 new customers, improved profitability and strengthened its position in the sale of internet and TV packages. However, alongside this, one of the main reasons for the rating upgrade is the company’s close ties to the state, something Fitch states explicitly.
The expectation is that the Serbian state would assist Telekom if problems arose, and this is why the company’s rating is better than it would be based solely on its financial indicators. Fitch also warns that Telekom remains heavily indebted, and that this continues to be the company’s greatest risk.
The agency notes that a large portion of Telekom’s revenue is in dinars, while most of its debt is denominated in euros, meaning that any significant weakening of the dinar could create problems.
The conclusion emerging from the report is therefore that Fitch has improved Telekom’s rating, but still does not consider it a completely financially secure company.
Telekom’s borrowing and business operations
Telekom has indeed grown strongly in recent years, but through extensive borrowing.
In October 2024, the company issued international corporate bonds worth $900 million on the Euronext Dublin stock exchange. That money, like the planned new issue, was intended for refinancing existing debt.
Furthermore, on 25 September 2025, Telekom issued a new corporate bond offering worth 23.5 billion dinars in order to refinance old debt from 2020, which matured on the same day. This new bond issue also has a five-year maturity period. According to figures from financial reports, Telekom’s total loans at the end of 2024 amounted to around 246 billion dinars.
In 2024, Telekom generated a profit of around 10 billion dinars, significantly less than in 2023, when profit stood at around 34.1 billion dinars. At the same time, financial expenses increased from 17.8 to 32.7 billion dinars, while interest expenses rose from 15.3 to 25.1 billion dinars.
It should also be recalled that there was considerable controversy surrounding overpriced sports broadcasting rights.
The most striking figure concerns the rights for the English Premier League, for which Telekom, through Arena Sport, reportedly pays around €100 million per season, or €600 million for the 2022–2028 period. According to media reports, this represented a 700 per cent increase compared with the previous rights cycle. According to reports by SportBusiness, Telekom’s aggressive acquisition of rights also affected other competitions – rights for Italy’s Serie A allegedly rose by around 400 per cent, NBA rights by more than 200 per cent, and UEFA club competitions by around 133 per cent.
During 2025, Telekom also carried out a major acquisition of part of United Group’s assets, thereby purchasing all sports broadcasting rights for the Western Balkans.
As a result, Arena Sport consolidated all the major sporting competitions – the English, Spanish, Italian, German and French football leagues, the NBA, the EuroLeague, the ABA League, tennis, Formula One, MotoGP and numerous other competitions. Arena Channels has established itself as the central pillar of Telekom’s media strategy. In 2024, Telekom invested more than 32 billion dinars in recapitalisation, of which 30.4 billion dinars went into Arena Channels Group.
Telekom’s greatest advantage is state backing
Nenad Gujaničić, chief broker at Momentum Securities, told the newspaper Danas that Telekom is known as a company that addresses foreign investors more than domestic ones, where minority shareholders are treated in a “dismissive” manner.
“The best evidence of this is the company’s unwillingness to go public on the stock exchange since shares were distributed in 2012. The situation is no better when it comes to reporting either, which is why we still do not know the annual results for 2025,” he pointed out.
According to him, this is a company characterised by opaque business practices, negative cash flow, dividend payments financed through loans, and frequent liquidity problems – something its suppliers know best.
“Unfortunately, the current management has been given free rein regarding the financial leverage it can use, and it appears there is no oversight concerning the justification for borrowing or the projects into which these funds are being channelled,” Gujaničić believes.
(Danas, 08.05.2026)
https://www.danas.rs/vesti/ekonomija/telekom-srbija-kreditni-rejting-obveznice-dugovi/