Crnogorski Telekom 2018 AnnuAl RepoRt Report 2018.pdf · CRNOGORSKI TELEKOM 2018 ANNU AL REPOR T DEAR SHAREHOLD ERS This version of our report/ the accompanying documents is a translation

Crnogorski Telekom2018 AnnuAl RepoRt

Crnogorski Telekom 2018 AnnuAl RepoRt

Dear shareholDers

this version of our report/ the accompanying documents is a translation from the original, which was prepared in Montenegrin. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.

ConTenT:to ouR ShAReholdeRS About Crnogorski telekomletter to our Shareholders

MAnAgeMent RepoRtManagement Report for the Financial Year 2018Crnogorski telekom’s Management Board of directors ChiefExecutiveOfficerandManagementCommitteeVision and StrategyRegulatory environmentpromotions and offers

huMAn ReSouRCeS

CoRpoRAte ReSponSiBilitY

Dear ShareholDerS

This version of our report/ the accompanying documents is a translation from the original, which was prepared in Montenegrin. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.

3Dear ShareholDerS

CrnogorSki Telekom 2018 AnnuAl RepoRt

To our shareholdersABout CRnogoRSki telekoM

Crnogorski telekom (hereinafter “Crnogorski telekom”, “telekom”, “Company”, “Ct”) is the largest telecommunications company inMontenegro.Itprovidesawiderangeoffixedandmobiletelecommunication services (voice, internet, tV, FMC services, leased-line circuits, data networks, iCt and Cloud solutions).

CrnogorskiTelekomfullydigitalizedthefixed-linenetworkin2007and brought AdSl coverage to a complete customer base by the endof2012.From2011CTisenhancingitsfixedbroadbandnetworkthroughroll-outoffibernetworkandthroughVDSLfrom2016.In2007,CrnogorskiTelekomstartedanIPTVservice,whilein 2016 “tVzaSve”, a dVB-t2 based service, was launched in cooperation with Radio-broadcast Centre. in 2011 Crnogorski telekom started offering iCt solutions. Full migration to iMS was completed in 2015.

Since entering the mobile market in 2000, the company has always offered innovative and advanced services to the Montenegrin market and has been experiencing dynamic growth. A 3g network waslaunchedinthesummerof2007,while4Gservicewaslaunched in 2012. in 2016, Crnogorski telekom renewed all of the existingfrequencybandsandacquiredsignificantportionofthenew bands that were the subject of the Spectrum auction.

in May 2009, Crnogorski telekom a.d., t-Mobile Crna gora d.o.o and internet Crna gora d.o.o were merged into one legal entity, Crnogorski telekom a.d.

From 2012 all products are marketed under the t- brand.

InApril2005,MagyarTelekomobtaineda76.53%interestinCrnogorski telekom, and Crnogorski telekom became part of DeutscheTelekomGroup.InJanuary2017,HTHoldingdoo,company fully owned by hrvatski telekom, bought the complete Magyar telekom’s stake in Crnogorski telekom A.d. deutsche TelekomAGholds51%oftheHrvatskiTelekomshares.Deutschetelekom is one of the leading telecommunication companies in the world, present in over 50 countries worldwide. With members of deutsche telekom group Crnogorski telekom has regular transactions. details of related party transactions are given in the company’s Financial Statements, note 29.

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dear shareholders,

in 2018, we achieved two main strategic goals - we stabilized revenuesandincreasedprofitability,whichisagreatsuccessand a result of the commitment of all employees in the company. Crnogorski telekom is on the right path to deliver growth in all businesssegmentsthroughefficiencyincreaseandbusinesstransformationandthusremainthefirstchoiceforcommunicationand entertainment for Montenegrin customers.

We are particularly proud of the positive developments in customer baseofthefixedinternet,TVandpost-paidsegment.Afterseveralyears, we achieved growth in retail revenues and successfully implemented turnover strategy in this segment. the growth of retail revenues has almost completely offset the decrease in wholesale revenues, and total revenues show substantially better trend compared to previous years.

Operatingprofitbeforeinterest,taxesanddepreciation(EBITDA),excludingspecialeffects,amountedtoEUR31.4million,whichisanincreaseby6.5%comparedtothepreviousyear.ThenetprofitamountedtoEUR7.3millioneurosandishigherby40%,i.e.EUR2.1millioncomparedto2017.

As a technology leader in the market, we continued to invest in infrastructure development to enable our customers to access the most advanced telecommunication services. having in mind the growing need for mobile internet services, the company was particularly dedicated to the development of the mobile network. Currently, we cover almost the entire populated territory of Montenegrowith4Gnetwork,withspeedsupto150Mbps,whileatsomelocationsuserscanaccessspeedsofupto400Mbps,with4G+technology.ThereliabilityofTelekom’s4Gnetworkisbestillustratedbythefactthatmorethanhalfofthetotal4GmobileinternettrafficinMontenegroin2018passedthroughournetwork.

the company continuously invests in improving network performance. planned investments include the modernisation of existing infrastructure as well as the future development of nB iot and 5g technology, in order to provide our customers with access to even broader range of modern services and technologies, and enable new development opportunities for the Montenegrin economy.

Inthefixedsegment,thankstothedevelopmentandexpansionoffiberinfrastructure,morethan82thousandhouseholdsinMontenegro has access to best quality services. As a result of investments in existing copper infrastructure with advanced new technology, 68 000 households has access to turbo dSl. thanks to the investments, the average speed of internet packages has grownby61%,whichbringsMontenegrosignificantlyclosertotheobjectives of the european digital agenda for the year 2020.

In2018wemadeasignificantsteptowardsexpandingfibernetwork outside the urban areas thanks to the agreement on theuseoffiberinfrastructurethatwesignedwithCrnogorskielektrodistributivni sistem (CediS). this created the conditions for the provision of broadband services in suburban and rural areas, and so far, thanks to this agreement, over 10 000 households gained access to modern telecommunications services.

our premium service Magenta 1 counts around 30.000 customers, making it the most popular integrated product on the telecommunications market. Magenta 1 offers the best combinationofservicesinthefieldofmobileandfixedtelephony,television and the internet, and it is a solution created to meet all family needs when it comes to communication and entertainment. Theofferisconstantlyupgradedwithnewbenefits,developedtomeet the needs of our customers and current usage trends.

5Dear ShareholDerS

CrnogorSki Telekom 2018 AnnuAl RepoRt

in the past year we have made an important step forward in the fieldofdigitizationandwiththeGovernmentofMontenegrowesigned a Memorandum of understanding and cooperation for digital Montenegro, which represents a framework for further development of the infrastructure and new generation networks, as well as development of iCt solutions, in order to improve theefficiencyofservicesandthequalityoflifeofMontenegrincitizens.WiththisinitiativeweonceagainconfirmedthatwearethefirstpartneroftheGovernmentandthebusinesssectorintheprocess of digitalization.

We launched many innovative projects, e.g. Smart City solutions that have already been implemented in several Montenegrin towns. Smart parking is provided in the centre of podgorica, smart irrigation system in cooperation with a local winery was also implemented in the capital city, while the Municipality of herceg novi launched a system for monitoring air quality and noise levels. First stop for charging electric cars is implemented in Sveti Stefan. Webelievethatthisisonlythefirststeptowardsmodernizationand creation of better living conditions in Montenegrin cities, and we are proud to say that our technologies and services can provide a better future for generations to come.

In2018wewererecognizedasleadersinthefieldofcorporategovernance in Montenegro. the prize awarded by Montenegrin stock exchange is proof of our effort and commitment to the principles of transparent and responsible business that is in the best interest of our shareholders, customers, employees and societyasawhole.Throughanumberofprojectsinthefieldofcorporate social responsibility, we continued to actively contribute to the development of local community and strive to be present in all areas that are important for the Montenegrin society.

dear shareholders, we appreciate your trust. With your support and the great commitment of all employees in the company, we wereabletoachieveourgoalsfor2018–toincreaseprofitability,stabilize revenues and reverse the negative trends. thanks to the results achieved, in 2019 we have the opportunity for greater investment in the development and implementation of new technologies and services, which opens the door for further growth, innovation and winning leadership positions in all segments. We believe that 2019 will be the year of success and a year in which we will once again meet your expectations.

nikola ljushev

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managemenT reporTMAnAgeMent RepoRt FoR the FinAnCiAl YeAR 2018

Highlights § In2018CTachievedalmostflatrevenuedevelopmentandincreaseofEBITDAandNetprofit. § TotalrevenuesamountedtoEUR85.1million,1%YoYdecrease.Revenuedecreasewasmainlydrivenbylowerwholesalerevenue

which was partly compensated with higher retail revenues. § NetprofitincreasedbyEUR2.1milliontoEUR7.3million. § Investmentscontinuedonahighlevel:CapitalexpenditurewasEUR24.1million(+30%YoY). § DividendinamountofEUR4.7millionwaspaid.

Revenues and ProfitabilityIn2018,CrnogorskiTelekomfocusedonfurtherextendingits4Gmobilenetwork,fibernetworkrolloutandimprovementofcoppernetwork through VdSl, the improvement of existing services and launch of new ones. it was a year of strong competition presence on thefixedservicesmarket.CTmanagedtokeepstablefixedbroadbandcustomerbaseandtogrowinTVsegment(bothIPTVandDVB-T2services). in the mobile segment, Ct was able to keep leadership positions in overall postpaid, business-segment postpaid and to keep strong positions in residential segment postpaid and in mobile internet. Mobile services portfolio was further enhanced and renewed. Afteryearsofrevenueandprofitabilitydeterioration,CrnogorskiTelekommanagedtolimitrevenuedecreasetoonly1%andtoachieveprofitabilitygrowth.

CrnogorskiTelekom’stotalrevenuesdecreased1%YoYandreachedEUR85.1million.Positiverevenuedevelopmentsreferredto: § Postpaidrevenues(+3%),influencedbythesuccessofMagenta1andportfoliorestructure; § TVrevenues(+2%),drivenbythegrowthofcustomerbase § Dataservicesrevenuesincreased2%,drivenbythe11%growthofICT § Equipmentrevenuesincreasedby22%.

Comparedto2017,majorrevenuedeviationsreferredto:

§ Fixed-linevoiceretailrevenues(-12%),influencedbycustomerbasedecrease,retailpriceregulationanddecreasedusage; § Fixedbroadbandrevenues(-6%),impactedbycompetitionandretailpriceregulation; § Mobileprepaidrevenues(-7%),dueto,lowerusageandprepaidtopostpaidmigration; § Interconnectionandvisitorsrevenues(-14%),drivenbydecreasedmobileterminationratesandlowerincomingtraffic,aswellasstrong

Visitorsperformancein2017.

Asinpreviousyears,CrnogorskiTelekomwasmakingeffortstoincreaseefficiencyanddecreasethecostbase.TheresultwasEUR1.9millionor2%YoYdecreaseinoperatingexpenses.Operatingprofit(EBIT)amountedtoEUR7.8million.NetprofitamountedtoEUR7.3million.

Main financial KPIs (m€) 2017 2018 Δ Δ%Revenues 85,3 84,2 -1,1 -1,3

eBitdA w/o Si 29,5 31,4 1,9 6,4

EBITDAw/oSImargin(%) 34,5 37,2 2,7

eBitdA 28,5 30,7 2,2 7,7

EBITDAmargin(%) 33,4 36,5 3,1

Operatingprofit 6,6 7,8 1,2 18,2

Netprofit 5,1 7,3 2,2 42,9

total Assets 191 182 -9 -4,5

CApeX 18,6 24,1 5,5 29,5

number of employees (Ye) 552 548 -4 -0,7

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Main non-financial KPIsIn2018,thenumberoffixed-lineconnectionsdecreasedby7%,asthecustomerchurnwasacceleratedbystrongcompetitionactivities.Ontheotherhand,thenumberoffixedbroadbandconnectionsincreasedby1%,whileourTVservices(IPTVandTVzaSve)werebothgrowing,by9.000intotal(14.6%).

Fixed line operations KPIs (in thousands) Dec 31, 2017 Dec 31, 2018 Δ Δ%Fixed-voice connections, Total 122,6 113,7 -8,9 -7,3Residential 105,0 96,4 -8,6 -8,2

Business 17,6 17,2 -0,4 -2,3

FixedvoiceMarketshare(%) 81,4 66,4 -15,0

Fix broadband connections, Total 69,8 70,4 0,6 0,9Residential 61,4 61,9 0,5 0,8

Business 8,4 8,5 0,1 1,2

BBInternetMarketshare(%) 49,9 44,0 -5,9

TV connections, Total 63,6 72,9 9,3 14,6iptV Residential 54,1 62,2 8,1 15,0

iptV Business 2,3 2,8 0,5 21,6

tVzaSve 7,1 8,0 0,9 12,6

PayTVMarketshare,inclTVzaSve(%) 31,0 31,9 0,9

Attheendof2018,CrnogorskiTelekomcustomerswereusing369.000SIMcards,whichwasanincreaseof17.000or5%comparedto the previous year. it was driven mainly by the growth in postpaid, while prepaid was stable. the total SiM market share amounted to32.6%.ThepostpaidSIMbaseincreasedYoYby16.000or7.6%,drivenbythesuccessofMagenta1,redesignedportfolioandconversion of customers from prepaid to postpaid. Crnogorski telekom remained the market leader in the postpaid segment.

Mobile line operations KPIs (in thousands) Dec 31, 2017 Dec 31, 2018 Δ Δ%

number of SiM cards, total 352,1 369,4 17,3 4,9

prepaid 140,8 142,0 1,2 0,9

postpaid, total 211,4 227,4 16,0 7,6

postpaid Residential 82,9 95,1 12,2 14,7

postpaid Business 128,5 132,3 3,8 3,0

Mobile customers market share (%) 33,7 32,6 -1,1

Mobile internet customer number 157,2 168,9 11,7 7,4

Mobile Internet customers market share (%) 37,6 36,6 -1,0

Mobilepenetration(%) 168,5 183,0 14,5

number of employees 552 548 -4 -0,7

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main invesTmenTs

FTTH Ftth project, one of the most important strategic projects in Ct, achievedsignificantgrowthin2018inbothundergroundandAirfibernetwork.AvailabilityofFTTHservicesisprovidedforover93%flatsinurbanareasof19municipalities,andover42%ofhouseholds on the national level. Share of active users in actual FTTHpotentialis21%.Comparedwith2017,wehave9%morehouseholds covered with speeds of 30Mbps and more, as well as 7%morehouseholdscoveredwithspeedsof100Mbps.

Further Ftth development is ensured through partnership with CediS and Javno komunalno, which will enable more rapid expansion of Air Ftth in suburban zones. in 2018, we successfully implemented Air Ftth network in 10 zones of 3 municipalities, with 5 more zones ongoing, covering 8 thousand households.

VDSL/VectoringVDSLRoll-Outprojectsignificantlysupportsourplanstoretainexisting customer base and attract new customers in internet and iptV segment. VdSl coverage increased by installing outdoor Cabinets at 50 locations in suburban / rural areas without Ftth, which further improved quality of copper network, and with potential to support future Ftth users.

Mobile access network Ct continued with successful results in mobile access network, withsignificantLTEcapacity&coverageexpansion:6xmoreCAsites,60%moreLTE800sites,24newlocations.Thereisalsooptimization&qualityimprovement:Speechquality-improvedfor35%;Callsetuptime(CST)–shortenedfor30%.P3measurementsfor2018arefinishedandsignificantlyimprovedcomparedto2017--888overallpointsvs713points.

ECN2MSAN migration Thisprojectwassuccessfullyfinishedaftermigrationof204(100%)locationsandallofourbroadbandcustomersonMSANtechnology. Within scope of this project, more than 500 eCns were disconnected from the network. in addition, nearly 600 of new MSAn VdSl boards were installed just for this purpose.

IMS Modernization and Geo-Redundancy in addition to the implementation of geo-redundancy of all customerbasesonnewconvergentplatformsforbothfixedand mobile services, the implementation and integration of the iMS core platform at the disaster recovery site was completed in 2018, with the upgrade of existing iMS core platforms at the primary location. Migration of customer services to new iMS core hardware and software systems, which are now completely geo-redundant, has been done, which means that in case of problem in functioning of iMS core platform in podgorica, customer are automatically registered on the iMS core platform in dRS Bijelo Polje,whereuninterruptedfixedvoiceserviceissecured.

SIP interconnection iii phased project targeting to completely migrate to Sip interconnectionthelocal,nationalandinternationaltrafficoverneW Core network element – iSBC, as prerequisite for removal of old international exchanges.Firstphaseofpilotmigration,localtrafficbetweenCTmobileandCTfixnetwork,isongoing.

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Free Cooling project aimed for the optimization of existing hVAC (heating, ventilation and air conditioning), in order to achieve energy savings and reduction of Co2 emmission. performance monitoring was enabled on all sites, in order to control switching between free cooling units and existing hVAC. technology was implementedon55locationsasthefirstphaseoftheproject.

TV ServicesiptV is one of the core services offered by Crnogorski telekom. Therefore,changingtheExtraTVinterfacehadasignificantimpact on user experience. With version 2.6, during 2018, we implementedthefirstmajorchangetotheuserinterfacesincethe service was introduced. it is about a brand new menu layout, designed by the dt hub. the project was implemented at the group level, in cooperation with Magyar telekom and Makedonski telekom.

Within the rollout of a new client, the following tasks were realized:All 63k users/StBs upgraded to latest iptV client. new extra tV appearance was implemented, tV content extension and time shift. Also, new channels were introduced, among which 11 new hd channels.

ACS upgradeACSplatformHW&SWupgradedwithextensionofimportantbusiness use cases that highly support digitalization of processes. this should have a high impact on more agile provisioning of services.

One APPhAl implementation is strategic digital transformation project in dt group. hAl (harmonized Api layer) is dt conceptual and practical solution for decoupling frontend – backend systems by introducing new Api abstraction layer in most appropriate manner.Inthefirstphase,agreedsetofAPIsforOneAppmobileapplication are developed in Crnogorski telekom. oneApp is thefirstprojectdevelopedonthatmiddlelayer.Developmentofrest Apis, including payment management, is in progress. other frontend systems, like portals and e-commerce solutions, will use it in future.

EVENTUS – HardWare upgradein 2018, a new design was developed for eVentuS.hW, which has been acquired, has become a part of virtualization infrastructure and, by increasing the number of servers, we have gained better performance, stability and redundancy of the virtual environment.

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Siniša ĐuranovićChairman of the Board of directors

SinišaĐuranovićwasbornin1972inZagreb.HegraduatedfromtheLawFacultyinZagrebin1997.From2010to 2013 he attended the iedC Business School in Bled - president MBA. he started his career at the Filipovic law Firm dealing with the privatizations of larger companies (hrvatski telekom, privredna banka...), and consulting international clients and buyers and sellers in major acquisitions. he joined hrvatski telekom in 2000 as Assistant of director for Regulatory Affairs. he became director of Regulatory Affairs in 2002, and executive director of Regulatory Affairs and Competition Affairs in 2005. he held this position until 2009 when he was appointed as Chief legal Advisor / operational director for legal, Regulatory and Competition Affairs, relations with public institutionsandbusinesscompliance.From2002to2014hewasamemberoftheSupervisoryBoardofEronetmobile communications doo Bosnia and herzegovina and t-Mobile hrvatska doo, vice president of Combis doo and ht Mostar doo Bosnia and herzegovina, and president of the Supervisory Board of iskon internet doo. he currently hold the positions of the Wholesale director, Chief legal advisor and Senior Vice president of hrvatski telekom, and by the decision of the executive director is also responsible for coordination of human resources affairs. he is also currently chairing the Supervisory Board of optima telekom dd, and is a member of the management board of the American Chamber of Commerce in Croatia. As a member of the Board of directors of Crnogorski telekom, which he is chairing, he was elected at the ordinary Shareholders’ Assembly held on May 31, 2017.Hewasre-electedattheOrdinaryShareholders’AssemblyheldonMay30,2018.

marC sTehleMarcStehle,born1967,holdsadiplomainEconomicsfromtheUniversityofAppliedSciencesDüsseldorf,germany. Before joining deutsche telekom Ag in 1996 he worked for ReWe Ag Food Retail in Controlling, FMp PriceWaterhouseCoopersinTaxandSchitagErnst&YoungGmbHinExternalAudit.MarcStehlestartedhiscareer at deutsche telekom Ag in group Controlling as a Senior Controller. in 2000, he took over the position of VicePresidentofBusinessDevelopmentValueAddedServices.In2004,MarcStehlewasappointedasSeniorVice president Controlling at telekom Shop Vertriebsgesellschaft, the Retail Branch of dtAg. in 2008, he moved to t-Systems international, as Senior Vice president Finance and Controlling, and became CFo of t-Systems-gei. For more than 6 years he worked in different Management and Board positions at t-Systems group, e.g. t-Systems iberica, Solutions for Research gmbh. in addition, he was engaged on different Supervisory Boards. Since 2015, Marc Stehle is working again for deutsche telekom Ag as Vice president in the Controlling Segment europe. in 2016, he became Member of the Supervisory Board hrvatski telekom d.d. As a member of the Board of directors of Crnogorski telekom, he was elected at the ordinary Shareholders’ Assembly held on May 30, 2018.

Crnogorski Telekom’s Board of direCTors

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nataša rapaićNatašaRapaićwasbornin1969inZagreb.ShegraduatedeconomicsattheUniversityofZagrebin1993.Shewas a Spanish government scholarship holder at MBA instituto de empresa in Madrid in 1999 and 2000. dur-ingherstudies,sheworkedasabookkeeperatUniversalZagreb,andfrom1993to1997atMilnaParketZagrebwhereshewasoneofthefounders.From1997to1999,sheworkedasamarketanalystattheSpanishEmbassy’seconomyofficeinZagrebwhenshemovedtooneofthelargestSpanishbanks-CaixaGaliciaMadridwhereshehas covered the position of business analysts in the investment sector. From 2000 to 2003 she worked at euro-praxis Consulting in Madrid. in 2003, she took the position of operational director of Corporate Communications and pR in hrvatski telekom, and in 2005 she was appointed as a member of the executive Board of t-Com and ChiefMarketingOfficer,whichshehelduntil2009.In2010shetookthepositionofOperationalDirector-ChiefMarketingOfficerforBusinesscustomers,andsince2013sheisamemberoftheManagementBoardandChiefOperatingOfficerforResidentialcustomers.SheisamemberoftheSupervisoryBoardoftheAmericanCollegeofManagementandTechnologyinDubrovnikandIskonZagreb,whichsheischairing.AsamemberoftheBoardofDirectorsofCrnogorskiTelekom,shewaselectedattheOrdinaryShareholders’AssemblyheldonMay31,2017.She was re-elected at the ordinary Shareholders’ Assembly held on May 30, 2018.

saša kramarSašaKramarwasborninČakovecin1968.HegainededucationattheFacultyofElectronicEngineeringandComputinginZagreb,alongwithattendingApple’strainingforservicing,salesandmarketing.Since2000,hehasattended a number of prestigious european business schools, among others the business school in St. galenn, edinburgh MBA and the iedC Management School in Bled where he was trained in sales management, strategic management for directors, customer relationship management and human resources management and corporate finance.Hebeganhiscareerinearly90’sattheAppleCenterNovel,wherehespenttheentire10years,firstasan Apple service engineer and later as Apple’s service and support director, sales and marketing director and finallyCEO.Duringthefirsthalfof2000,hebrieflycarriedouttheaffairsofsalesadviseratBellodoo,whilstinJune he took over the position of iskon internet dd Sales director. he performed this duty until 2002 when he wasappointedasamemberoftheManagementBoardandDirectorofSalesandMarketing.In2007hewasappointed Chairman of the Management Board and executive director, which he performed until June 2016 when hewasappointedasamemberoftheManagementBoardandChiefOperationOfficerforbusinesscustomersof hrvatski telekom dd, which position he currently holds. As a member of the Board of directors of Crnogorski Telekom,hewaselectedattheOrdinaryShareholders’AssemblyheldonMay31,2017.Hewasre-electedattheordinary Shareholders’ Assembly held on May 30, 2018.

Balša ČavlovićBalšaČavlovićwasbornin1985inPodgorica.HegraduatedfromtheFacultyofEconomicsinPodgoricain2008at the Course of Business Management, where he is currently in postgraduate studies of the same course. during hisstudies,hewasengagedinadvisoryactivitiesatFastWorkerdooPodgorica,andalreadyin2007hewasthevice president of Montebella Company doo podgorica, and was the executive director of Adventure doo podgorica. FromApril2008untilDecember2009hewastheinvestmentadvisorforbrokeragehouseBull&BearbrokerADpodgorica, and in december 2009 he became executive director of premija plus doo podgorica. From February 2014toMarch2015hewasre-engagedinadvisoryactivitiesattheBull&Bearbroker,andfromApril2014toApril2016,hewasappointedasChairmanoftheBoardofDirectorsofDZUTrendADPodgorica.Currentlyhecovers the positions of Chairman of the Board of directors htp trend korali Ad Sutomore and executive director ofPLCMoračaADPodgorica.AsamemberoftheBoardofDirectorsofCrnogorskiTelekom,hewaselectedattheOrdinaryShareholders’AssemblyheldonMay31,2017.Hewasre-electedattheOrdinaryShareholders’Assembly held on May 30, 2018.

By the ordinary Shareholders’ Assembly held on May 30, 2018, Ms. Sussane krogmann was a member of the Board of directors. She was dismissed at the subject Assembly, upon which her membership in the Board of directors of Crnogorski telekom ceased.

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Chief exeCuTive offiCer and managemenT CommiTTee in 2018

DušanBanovićwasbornin1978.Hegraduatedandobtainedamaster’sdegreeattheFacultyof electrical engineering, university of Montenegro. he started his career in internet Montenegro, while he was a student in 2000 and did many different functions in technical department. Since the internet Montenegro became an integral unit of telekom, he did many managerial functions in departments for technology and Corporative Strategy. in 2012, he was named as a Marketing director for Business Customs and he was successfully doing it for 3 years. in 2015 he became B2BDepartmentDirectorforbusinessandoperatingenforceabilityandbythebeginningof2017hebecameresponsibleevenforthefieldofcorporativestrategyandinternalcommunicationsasaDirectorofBusinessCustomerssegmentandStrategy.In2017hetookupapositionof Residential Customs department director and became a member of the Management Committee. From 2018 he is also in charge for Customer experience.

nikola ljushev, electrical engineer of electronics and telecommunication, started his career in 1997intelecommunications,workinginDTgroup(TelecomofMacedonia),Cosmote/OTEandAustrian telecom group, where he achieved such results that became extraordinary example ofhugesuccessontheEuropeanlevel.Heisawardedleaderinthefieldoftelecommunicationon the global level, and acquired further education at prestigious international education institutions,includingtheHarvardBusinessSchool.OnSeptember1,2017hetookoveraposition of executive director of Crnogorski telekom.

nikola ljushevChiefExecutiveOfficer

Dušan Banović Residential Customers department director

After organization restructuring in 2017, the Management Committee was established, a counciliary body, and it was under his presides.

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GorDana BlaGojevićdirector of the Financial department

GordanaBlagojevićwasbornin1982.ShegraduatedattheFacultyofEconomics,Universityof Montenegro in 2005. the executive Master degree, with an emphasis on accounting andfinance,sheacquiredattheRotterdamManagementUniversity,ErasmusUniversityin2013.ShehasbeeninCrnogorskiTelekomsince2009.Intheperiodfrom2009to2017,sheperformed managerial tasks in the Crnogorski telekom Finance department, from managers intheaccountingdepartment,throughcustomerfinance,controlling,andtheDirectoroftheAccountingDepartment.ShewasnamedDirectoroftheFinanceDepartmentinMay2017,when she became a member of the Management Committee.

MiroSlav janiČićdirector of the human Resources department

MiroslavJaničićwasbornin1975.HegraduatedattheFacultyofPhilosophy,Universityof Montenegro, department of english language and literature in 1999. he obtained the executive MBA degree at the iedC Business School in Bled in 2008. he began his career in both the private and the state education department. this was followed by an engagement in the organization for Security and Co-operation in europe (oSCe) in the period from 2003 to 2005. he has been in Crnogorski telekom since 2005. he joined the human Resources department of Crnogorski telekom in mid-2010 as a hR manager. he became the hR department director at the beginning of 2012, and since May 2015 he has been the director of human Resources department. he was named director of the human Resources DepartmentinMay2017,whenhebecameamemberoftheManagementCommittee.

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pavle Đurovićdirector of the Corporate and legal Affairs department

PavleĐurovićwasbornin1976.HegraduatedattheLawFaculty,UniversityofMontenegro.he obtained diploma in international trade law at the international postgraduate trade law CenterinTorino.HestartedhiscareerinthedomesticlawofficeVukotic-Durutovicandcontinuedhisinternationalofficeasalegaladviserin2000andwasnamedDirectoroftheInternationalLawOfficeHarrisons-SolicitorsinPodgoricainthesameyear.Inthisperiod,hewasresponsibleforthelargestM&AandprivatizationoperationsinMontenegro.Hehasbeenin Crnogorski telekom since 2003, when he was named director of the legal department. Since 2010 he has been the Secretary of the Company. he is internationally recognized memberofDTGroupforCorporateAffairsandLegalAffairs.In2017,hewasnamedDirectorof the Corporate and legal Affairs department, Secretary of the Company and member of the Management Committee.

preDraG perković director of the Business department

PredragPerkovićwasbornin1977.HegraduatedattheFacultyofEconomics,Universityof Montenegro, and received his master’s degree at the Faculty of economics, university of Belgrade.HisworkengagementinCrnogorskiTelekomstartedin2004intheMarketingandSales department. in the period from 2006 to 2008, he managed the Sales department for large companies. he was named director of direct Sales in 2008, and director of Sales operations andOperationalExcellence2014.HewasonthepositionofSalesDirectorfromMay2015toMay2017,whenhewasnamedDirectoroftheBusinessDepartment.HeisamemberoftheManagement Committee of Crnogorski telekom.

valentina raDulovićdirector of technology department

ValentinaRadulovićwasbornin1979.ShegraduatedattheFacultyofScience,Universityof Montenegro, at the Faculty of Mathematics, and obtained the title of Master of Science in InformationTechnologyattheUniversityofSheffield.ShebeganhercareerasatraineeatCrnogorski telekom in 2003, after which she covered numerous responsible positions within the technical department. With her comprehensive approach to both technological and corporatestrategicgoals,shehasmadeasignificantcontributiontonumerousIT/NTprojectsandactivities.ShewasnamedDirectoroftheTechnicalDepartmentonNovember1,2017,when she became a member of the Management Committee of Crnogorski telekom.

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our vision

in a fast changing world,WeareyourfirstchoicetoliveinafullydigitallifestyleWhereveryouare,whateveryoudo;By aspiring to be the best in class.

our sTraTegy

Crnogorski telekom is leading telecommunications provider in Montenegro, with ambition to maintain its leading position, to improve its business performance and leverage on available resources. in order to achieve this, a new Corporate strategy is definedfor2017andonwards.Itisbasedonourvisiontobethefirstchoiceofourcustomersineverythingwedo,withthedesireto be the best.

the new strategy is based on three pillars, which are related to our three goals: Be # 1 in mobile Be # 1 in fixed Be # 1 in FMC (integrated) offers.

#1 in mobile. Mobile services are developing faster than ever and expectations of the customers are constantly increasing, therefore, ourgoalistofulfilltheseexpectationsandimprovethequalityofour customers’ lives by providing superior network experience. We are constantly improving quality of our network, with special focus on4Gtechnology,thatprovidesfastmobileinternet,fastcontentand applications download, better sound and video quality, and in general, it improves quality of customers’ communication and lives.

Telekomsignificantlyincreased4Gcapacityandcoveragein2018,andintheendof2018,96%oftheoutdoorpopulationinMontenegrowascoveredwith4GsignalbyCrnogorskiTelekom.Inadditiontothegrowthofthe4Gnetworkcoverageandcapacity,telekom will continue to monitor and enhance quality of network, so that our customers have the best network, the network they deserve.

#1infixed.CrnogorskiTelekomisleaderinthefixedbroadbandmarket while it is in the second place on pay tV market. telekom is continuously investing in development of optical network, as a basis for providing service with great quality, with focus in urban areas. in 2018 telekom started commercial deployment of air Ftth network, in order to reach more customers with optical network, as a precondition for super high internet speeds. When it comes to customers in suburban areas, we are continuously investing in VdSl, technology that was launched in 2016 and represents a newchapterindevelopmentofthefixedbroadbandforCrnogorskitelekom. As a result of all these investments, in the end of 2018, Telekomenabledaccesstosuperfastinternettomorethan62%households in Montenegro.

# 1 in convergent (integrated) offers Magenta 1 represents the bestofbothTelekom’sworld--mobileandfixedservices,andtelevision, in one package. With Magenta 1, customers have faster internet access, more tV channels, and a postpaid number with on-net and off-net and mobile internet. our ambition is to further develop and strengthen our integrated products offer, therefore our Magenta 1 package is refreshed in 2018, taking into consideration and adapting to changing needs of our customers.As one of the most innovative companies in country, telekom is leveraging on the opportunities of the digital age and constantly developing smart services. Company launched many Smart services in 2018 such as Smart parking, Smart bench, Air Quality Sensors, e ticketing, e mobility, and will continue with digitization of the society in years to come.the customer remains in the focus of our business and our ambition is to provide premium experience to our customers. Combination of superior network, best it solutions and premium brand will drive us to achieve this ambition.

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RegulAtoRY enViRonMent

the regulatory environment is characterized by implementation of the law on electronic Communications that is based on the eu regulatory 2009 framework, as well as a number of bylaws adopted in accordance with the law. the new regulatory framework is dedicated to ensure competitiveness in the market as well as obtaining a higher level of protection of consumer rights. AmendmentstotheLawenactedinJanuary2017partlyaffectedCrnogorski telekom operations.

OnCrnogorskiTelekom,beingdesignatedassignificantmarketplayer on various relevant market, were imposed numerous of regulatory obligations. out of all wholesale products offered to the market, based on the Agency’s resolutions from 2010, 2013, 2015 and2017,realinterestofalternativeoperatorswasshownonlyforduct rental.

the Cost Accounting and Accounting Separation obligations were implementedforbothfixedandmobileservices,asanobligationimposedonCrnogorskiTelekombeingSMP(SignificantMarketplayer) at some of the relevant market. Regulatory reports for 2016 basedonLRICmodelapprovedbytheAgencyin2018,while2017Reports were subject of the harmonization with the Agency during 2018 and the process continued in 2019.

In2017theAgencyforElectronicCommunicationsandPostalServicesperformedfiverelevantmarketanalysesdefinedinthe2014EURecommendation(bydefinitionitisaboutthesamerelevant markets already analysed in 2010 and 2013). Crnogorski Telekomwasagainidentifiedasthesignificantmarketplayer(SMP)inallfivemarkets.Additionally,in2012,theNRAapplieda three-criteria test on two retail markets: broadband and mobile services,tofindoutifthosemarketsweresusceptibletoex-ante regulation. the retail market of mobile services was found sufficientlycompetitive,whileCrnogorskiTelekomwasdesignatedasanSMPinthefixedbroadbandmarket.Uponapprovalofthe2013RegulatoryReportsforthefixednetwork,theNRA,forthe fourth consecutive year, performed retail price regulation of thefollowingservicesprovidedatfixedlocations:accesstothenetwork, broadband, as well as voice services (local, national and international calls) on a cost basis. price adjustment implied a decrease based on the approved Crnogorski telekom Cost Model for the respective year.

in 2018 the nRA applied, “three criteria test ‘’on Retail broadband marketand,findingthatthereiseffectivecompetitiononthemarket, decided that subject market is no more susceptible to ex ante regulation.

Following the Regional Roaming Agreement on roaming price decreasesignedin2014byfourBalkancountries(Bosniaandherzegovina, Macedonia Montenegro and Serbia) the Agency issued resolutions on price cap to be performed in three waves startingfromJuly2015whilethelastonewasinJuly2017.operators were obliged to decrease prices while the court procedure following Crnogorski telekom appeal against the Resolution is still ongoing.

InordertofulfiltheobligationfromtheRulebookonthemannerand deadlines for the implementation of security measures and the integrity of the network and services, Crnogorski telekom successfullyimplementedgeo-redundancysiteforfix,mobileandinternet service in August 2018.

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Universal serviceuniversal Service (uS) was commercially launched in december 2011,butwithoutsignificantinterestfromcustomersfortheservice. however, after introducing changes to the uS regulatory frameworkin2013,customers’interestsignificantlyincreased,especially for voice services and internet access. Following the results of the public tender for a selection of uSos (universal Service operator) for the period 2016–2021, the Agency designated Crnogorski telekom as the uSo for access to the network, voice and internet access service. interest for the services provided by Crnogorski telekom as uSo was higher than in the previous period. in addition to the three sites taken over from the previous uS operator, Crnogorski telekom is providing service in additional six locations. in 2018 Crnogorski telekom built three new locations (eight new subscribers connected). part of 2016 and2017ofCrnogorskiTelekomUSnetcost,amountingover34thousands euros, was compensated by other operators.Additionally, Crnogorski telekom is in the process of obtaining necessary preconditions for building four new sites, but the customers’ interest for services from some more locations is expected.

Number portabilitythe number portability service was commercially launched in 2011.In2018,interestfortheservicesignificantlyincreasedcomparingto2017(34.94%).Thisserviceisstillmoreusedbymobile network subscribers, however, it is becoming more and moreusedalsobythefixsegment.Almostallfixsubscribers,whousedtheservicein2017,portednumberfromCrnogorskiTelekomnetworktotheothernetwork,whilemorethan25%ofthetotalnumber of mobile subscribers who used this service during 2018 ported the number in Crnogorski telekom mobile network.

Regulatory feesunder the effective regulations, Crnogorski telekom pays annual fees for market supervision and use of radio frequencies, numerations and addresses to the Agency for telecommunications and postal Services as well as annual fee to the electronic Media Agency for providing iptV service.

Radio-frequency spectrumAt the Multi-Band auction for 800/2600 Mhz and 900/1800/2100 Mhz organized in July 2016, Crnogorski telekom won superior package that would ensure its position in the mobile segment for the next 15 years, as well as the basis for improvement of Crnogorski telekom technological leadership in the market. OngoingfulfilmentofspecialcoverageobligationsdefinedbytheResolution for 800Mhz band.

Sharing of infrastructureTheReferenceInterconnectionOffer(RIO)definesthetermsand conditions of collocation, for the purpose of interconnection realized in Crnogorski telekom’s premises. this includes rental of space in buildings, masts and cable ducts. the Rio conditions are valid only for operators looking for interconnection/access, while usage of infrastructure by operators for other purposes is subject to commercial negotiations. Apart from the Rio, the Reference UnbundlingOfferdefinesthetermsandconditionsofcollocationfor the purpose of local loop unbundling, including also rental of collocation space in Crnogorski telekom premises and ducts. Regulated prices for duct rental do not encourage investments in new duct deployment.

Termination of calls Based on the nRAs relevant resolutions on designation of significantmarketplayer(SMP)onrelevantmarkets,thenewterminationratesweredefinedbytheNRAinMay2018.Fixedtermination rates (FtRs) for local and single transit were equalised and amount 0.65 cents/min, while the mobile termination rate (MTR)forvoicetraffic,afterapprovingthe2016RegulatoryReports of all three operators, was reduced from 1.06 cents/min to 0,85cents/min. the next wave of termination rates decrease is expected in 2019.

Future Regulatory Developments during 2019, the enactment of the special new law is expected, in order to transpose in the Montenegrin legal framework the Directive2014/61/EUoftheEuropeanParliamentandtheCouncilfrom2014onmeasurestoreducethecostofdeployinghigh-speedelectronic communications networks.in 2019 the responsibly Ministry is expected to work on amendments to the electronic Communication law with aim to harmonize it with the new law on the State Administration.it was announced initiative for signing the new Western Balkan Agreement on Roaming price decrease (six Western Balkans countries to be involved).

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This version of our report/ the accompanying documents is a translation from the original, which was prepared in Montenegrin. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.

ManageMent report

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promoTions and offersReSidentiAl CuStoMeRS

Postpaidin 2018 Crnogorski telekom continued with postpaid growth, revenue and customer vise. Customer base increase continued in both segments, voice and Mobile internet. user growth was continued through numerous campaigns and promotions of MAX package, as well as through Magenta 1 portfolio innovation.Special focus in 2018 was on Mobile internet portfolio which was redesignedinQ22018andlaunchedtogetherwith4Gimagecampaign. Reshaped portfolio, with Stream on option included, and followed by increased network quality perception additionally firmedourMIpropositionasthemostattractiveonthemarket.

PrepaidChallenges on prepaid market continued in 2018, with evident market shift toward postpaid and total mobile revenue growth asafinaloutcome.Prepaidpricepositioningremainedstable(unattractiveness compared to postpaid) in Ct portfolio, but total market as well. Main activities relied on “Monster” portfolio and communication platformestablishedin2017(withcontinuousenhancementsofoptions available to customers)partnership with Voli, the biggest retail chain in the country continued in 2018. With each purchase of €15 and more, customer gets€2add-ononVolimprepaidaccount.InQ42018,Voliofferwas reshaped in a way that monthly subscription was introduced with 1gB dAtA included.

Magenta 1in Q2 2018 Ct reshaped Magenta1 offer by addition additional Magenta1 tariff and boosting postpaid element (”the best postpaid is postpaid in Magenta1”). promo of new portfolio was connected to Football World Championship and Ct broadcast sponsoring, what assured strong visibility.

Fixed segmentCt introduced new seasonal broadband, tV and bundled offers aimed at second home owners, an important market segment for a touristdestinationsuchasMontenegro.Thenewoffersignificantlyimproved customer experience, enabling one click activation and deactivation, with slight price premium. offer had excellent results, boosting 2018 broadband revenue and RpC.Special focus was placed on targeted, direct and segmented offer with aim to partially answer to aggressive competitors pricing, but also preserve the market price positioning.

TVzaSVEtVzaSVe is recognized as the most practical and mobile tV offer onthemarketwith97%ofcoverage.In2018,CTbuiltoninherentadvantages of mobility and ease of use by introducing simple prepaid packages for tVzaSVe. the new offers enable customers to buy the tVzaSVe receiver with three months of subscription included for a market leading price. When the included months expire, the customer can top up their tVzaSVe subscription by visiting any telekom or even retail store where mobile prepaid cards and top ups are sold (over 1.000 points of sale in the country). As a result of numerous activities, number of customers for TVzaSVEincreasedby15%YoY.

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BuSineSS CuStoMeRS

Postpaiddespite strong competition, during 2018 the number of customers of the Smart Business package continued to grow. At the end of2017,SmartBusinesstariffportfoliowasredesignedandenriched with a larger number of tariffs (including the premium package), additional minutes for calls, roaming and calls abroad andsignificantlylargerinternetresourcesforthefastestsurfingin4Gnetwork.Thepostpaidbasewashigherby3%comparedtotheprevious year, which ensured Crnogorski telekom leading position withamarketshareof45,2%.FocusontheSOHOsegmentiscontinued,salesactivitiesareintensifiedwithtargetedoffersfordifferent customers’ segments.

Fix segmentduring 2018 Crnogorski telekom continuously made intensive activitiestostabilizerevenuesfromfixedservices,whichresultedin a stable number of connections, both in voice and broadband. intensive sales activities in this segment were at migrating customerstotheBusinessDuotariffs,whichcombinedfixedvoiceand internet services. At the end of 2018, number of Biznis duo customerswasover1,750(shareoftheBusinessDuousersinBBcustomerbasewas21%).

Magenta 1 Businessduring 2018 the activities on the popularization of the integrated (FMCC) offer of Magenta 1 Business continued. existing offer is enriched with new tariffs in April (Magenta net and Magenta 1Business“Soft”asafirststeptoflexibleconcept).SpecialachievementwasintroductionofflexibleMagenta1Businessconcept as a main strategic goal in FMCC development. Flexible Magenta 1 tariff allowing customers to compile ideal package basedonthebusinessneeds,addingunlimitednumberoffixandmobiletariffsaccordingtoneeds.During2018,about700small and medium-sized companies (Soho and SMe) became customers of Magenta 1 packages. the total number of companies thatuseMagenta1attheendof2018was1,884,whichmakes28%oftheSOHO/SMEcustomerbase.Also,Magenta1tariff was enabler to migrate BB customers to VdSl and Fiber technology(42%ofM1customersusingtariffwithVDSLorFibertechnology). Share of Magenta 1 customers in BB base of medium-sizedcompanies(SOHOandSME)is44%.popularization of Magenta 1 and the migration of business customers to this tariff package directly affect the achievement of the strategic goal of the business segment, increasing the digitalization of small and medium enterprises through the introduction of Cloud services that are part of the integrated Magenta 1 offer.

ICTin 2018, the iCt revenue growth continued as a trend from the previous period. Revenue was generated from tailor made solutions and managed services. Contracts were realized mainly in hoReCA segment as well as through continuous cooperation with the leading banks in Montenegro. A special focus was on digitalization of customer business and developing software within the solution, especially in the SMB segment. during 2018, smart solutions and nB iot are recognized as globally prospective and fast-growing business models and in connection with this Smart parking, e ticketing and smart bench projects has been implemented. in 2018, we continued with acceleration in sales.

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Human resourCes

human resourCes

Continued responsible managing of the organizationorganizational changes have been continued during 2018 with thegoaltokeepcurrentefficiencylevelandfurtheroptimizethecosts, that overall resulted in reduction of management structure on different Company levels. using internal resources in terms of available human capacities, it came to the increase of personal responsibility on each level as certain organizational units were merged,withspecialattentiontocommercialandfinancesegment.Customers are still our main focus, which is why 2018 was also marked with the realization of the programs for increasing sales efficiencyinthosepartsoftheCompanythatareindirectcontactwithcustomers.Programsforincreasingsalesefficiencyarecarried out parallel with trainings in which way we are continuously improving employees’ knowledge and skills thus contributing to better customer experience.

Caring for employees Crnogorski telekom continued taking responsibility for its employees and devoted 2018 to improvement of employees’ perception related to their contribution on different levels in the organization itself, as well as to knowledge and skills development especially when it comes to digital training platforms but also to improvement of employees’ health. When it comes to development of employees, switching to the unique hR Suite system, Crnogorski telekom enables its employees to use digital formats in one place, in which was they have possibility to improve their professional and personal skills in a simple way. We implemented let’s grow eu program successfully, which is a basis for establishing culture of growth in all eu natCos. When it comes to local activities, we organized different programs based on the results of pulse check survey. We continued with the talent Management program, covering 16 of our employees who represent local talent pool of Crnogorski telekom. on the other side, in accordance with the business strategy of the Company, special emphasis is put on the professional development of employees who are in direct contact with customers, i.e. Call Centre agents and shop supervisors. in collaboration with the trade union, we continued with the realization of health and recreation programs for employees, by which we strive to positively affect maintenance of work-life balance. As a result of responsible dealing with health and protection at work related issues, we undertook actions on raising employees’ awareness about importance of regular health prevention checkups and broadening their knowledge about conscientious relation towards their own as well as their colleagues’ safety and health.

International projectsCrnogorski telekom implemented hR Suite system i.e. standardized hR it system, which covers different segments when itcomestoHRareas.Inthefirsthalfof2018,ourfocuswasontheimplementation of unique learning system through this tool, while in the second half of the year, our focus was on the preparation activities related to implementation of lead to Win process i.e. a new tool for performance and potential review (ppR) which will apply to directors, managers, experts and heads of units in our Company in 2019. introduction of new ppR, besides automatization of the process, has a goal to encourage cooperation inside dt group by continuous providing of feedback with the special emphasis on taking self-responsibility for individual development.

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Human resourCes

Internet in Service of Education Since2007,CrnogorskiTelekomhasbeenprovidingbroadbandinternet free of charge to all Montenegrin elementary and high schools, as well as pre-school institutions. during 2018, the initia-tive was continued, based on the agreement with the Ministry of education which provides the educational institutions with techni-cal capabilities to use the services of optical transmission and turbodSl, which will enable schools to increase service stability andbetterdataflow.

“Za svako dobro” Forthefifthyearinarow,CrnogorskiTelekomorganizedadonations’competition“Zasvakodobro”forprojectsparticularlysignificantforthecommunitythatareimplementedusingdigitaltechnologies. Areas of support include education and culture (media literacy and use of digital technologies for education of all generations, education for young people in SteM subjects, use of digital technologies for development and promotion of culture), environmental protection, inclusion, and creation of equal oppor-tunities for participation in the digital society. total funding for the competition amounted to euR 30,000 in 2018. A maximum of euR 6,000perprojectwasallocatedtoatleastfiveprojectswithspecialimportance.

the contest was open to applications throughout September 2018. Thebest10projectswereselectedoutofatotalof27submis-sions. in order to engage more people in the initiative, online voting for the best project was conducted on the website www.zasvakodobro.me which registered 3.525 votes. one donation was awarded based on the results of online voting, while the rest of the donations were allocated based on jury opinion. the most important criteria for evaluating the projects were relevance and benefittothecommunity,timelinessandthequalityoftheproject(innovation, feasibility and sustainability).

Funds were awarded to six projects. the winning projects were:1. “Support the digital inclusion”- technical equipment for schools

and kindergartens and teacher training for usage of software developed for better learning for kids with developmental chal-lenges

2. “little programmers 2” - programming and robotics courses for elementary school students

3. “new technologies support for kids with autism” – technical and expert support for kids with autism and their inclusion in digital society

4.“Pelicanvillage:Lifeontheraft!”–Campaignforprotectionandpromotion of the wildlife habitat of Skadar lake and the endan-gered species “pelecanus crisupus”

5. “3d classroom” - usage of 3d printing technology in education of elementary school students

6.“1clickforfullinfo”-onlinesupportforkidsfightingcancerandtheir families

CorporaTe responsibiliTy

As one of the leading companies in the country, Crnogorski tele-komstrivestobepresentinallfieldsimportantforMontenegrinsociety. Apart from the desire to provide our customers with the highest quality telecommunication services, we see our role in an active and constant contribution to the development of the com-munity where we operate and which we are part of.

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Human resourCes

Volunteer Club’s Activitiesin 2018, Crnogorski telekom Volunteers’ Club continued activities with the aim of promoting the principles of social responsibil-ity inside and outside the company. the Club joined forces with several ngos and organized thee planting initiatives in local parks in podgorica. the Club worked together with the Montenegrin OfficeforBloodTransfusiontoorganizeablooddonationinitia-tive for telekom employees and management. together with the international Women’s Club of Montenegro, the Club participated in Christmas fair and helped raise funds for several institutions in thefieldofeducationandchildrensocialcare.

Sport, Music and Cultureour sponsorship platform focuses on sports, music and culture - which is perfect for emphasizing our “life is for Sharing”. Within the company’s sponsorship strategy, sport has a special place, considering that it is an important area for the development of a healthy, modern and advanced society. the company is a golden sponsor of the Montenegrin national Football team and a general sponsor of the telekom First Montenegrin Football league. in addition, the company is traditionally a sponsor of the Buducnost Basketball Club. Crnogorski telekom sponsored numerous music events and activi-ties in 2018, including City groove Festival in podgorica, Southern Soul Festival in ulcinj.

Teachtoday initiativein 2018, Crnogorski telekom introduced teachtoday, an initiative for the promotion of safe and competent media use from deutsche telekom. it offers help to children and teens, parents, as well as educational professionals with materials and tips for teaching, parenting and growing up in a world where digital media is part of everyday life. on the occasion of the international Safer internet day, Crnogorski telekom organized a panel discussion about safe and creative use of digital media for kids. Montenegrin version of teachtoday’s specialized website was presented, which contains tips on how best to protect personal information, which age is appropriate for mobile phone use, how to safely use social networks, what it means to be safe on the internet, how to provide a safe password, how to use digital media more creatively, and similar content about digital media use that is of interest for kids, parents and teachers.

Supporting Charity Projects telekom seeks to contribute to addressing essential social chal-lenges in line with available resources. during 2018, Crnogorski telekom enabled the implementation of several projects of national importance:

§ parenting line, a support service for all parents in Montenegro with the aim of reducing domestic violence

§ SoS line for kids, support service for children in case of vio-lence and abuse

donation line for Foundation “Budi human”, a crowdsourcing platform for support to children who need medical treatment that is not covered by national health fund.

www.telekom.me

Documents

Crnogorski Telekom 2018 AnnuAl RepoRt Report 2018.pdf · CRNOGORSKI TELEKOM 2018 ANNU AL REPOR T DEAR SHAREHOLD ERS This version of our report/ the accompanying documents is a translation