From Pupin’s Coils to 5G Signals: Serbia’s Telecommunication Path to the Future

More than a century ago, Mihajlo (Michael) Pupin, the Serbian-American visionary who stretched human voice across continents, transformed telecommunication with his ingenious loading coils. Yet Pupin’s legacy was never just about technology; it was about bridging worlds. Between Serbia and America, invention and progress, the individual mind and collective advancement.

Today, that same current of transatlantic imagination runs through Serbia’s new digital awakening. As the nation prepares to weave a 5G network across its landscape, supported by the US Export-Import Bank and European partners, it reaches once more toward connection, innovation, and purpose. In this pursuit, echoes of Pupin’s spirit resound: a small country daring to connect itself to the world, and the world, in turn, reaching back.

Serbia’s 5G Transition: Between Digital Growth and Geopolitical Alignment

Serbia’s telecommunications landscape rests on a stable triopoly led by Telekom Srbija, Yettel, and A1 Srbija, which presents a balance between state control and private investment. With Telekom commanding around 42–44% of the market, followed by Yettel’s 33% and A1’s 24%, the structure reflects both competition and strategic oversight. The government’s majority stake in Telekom gives it not only influence but direction, positioning the company at the heart of Serbia’s digital transition and its 5G future. Telekom Srbija group operates in 13 markets, regionally and globally, and has 13 million users with a tendency for further growth, thanks to the fact that it continuously improves its offer with modern services and services necessary for the 21st century.

The arrival of 5G marks more than a technological milestone. It is a cornerstone of Serbia’s digital and strategic evolution. After years of delay that left the country among the last in Central and Eastern Europe to allocate spectrum, momentum is finally building. With Belgrade preparing to host Expo 2027, 5G has become the showcase of Serbia’s modernization and a promise of smarter cities, efficient governance, and digital innovation. The government has pledged nationwide 5G coverage by 2027, framing it not just as connectivity, but as identity, a signal of belonging to the next generation of global economies.

Yet, this story unfolds on a geopolitical stage. Serbia’s choice to seek external, state-backed financing from the US EXIM Bank marks a turning point, this being the first time an American institution has financed 5G rollout for a European telco. The move carries weight far beyond economics: it signals Serbia’s gradual shift toward transatlantic partners in a sector long influenced by China. Meanwhile, Europe’s EIB, under the “Team Europe” framework, adds another layer of strategic partnership, while China’s presence (led by Huawei) continues to linger through 4G and fiber infrastructure.

In this delicate balance between Washington, Brussels, and Beijing, Serbia’s 5G agenda becomes more than a network; it becomes a part of geopolitics. The upcoming vendor choices, whether Ericsson, Nokia, or open architectures like Open RAN, will define not only the country’s digital future but also its strategic alliances. Through this transformation, Telekom Srbija’s vision of becoming a “trusted global partner in the new digital era”, expanding into cloud, fintech, and IT services, positions 5G as both a nation-building project and a geopolitical message: Serbia is connecting to the world with the help of reliable partners.

The Deal in Focus

Telekom Srbija is nearing completion of a $50 million financing agreement with the US EXIM Bank, expected by November 2025, marking a turning point in Serbia’s 5G rollout. Announced by Director General Vladimir Lučić, the loan comes on exceptionally favorable terms, surpassing what commercial banks could offer. It represents a direct endorsement from the US government for Serbia’s digital transformation, being the first agreement of its kind between a European telecom operator and the US EXIM Bank.

The American loan complements a prior €70 million EIB investment, issued in 2021, to strengthen Serbia’s telecom backbone, expanding 4G coverage while accelerating 5G deployment to reach roughly 60% of the population in its initial phase, including underserved rural areas. Together, US and European financing provide both liquidity and credibility to Serbia’s 5G ambitions. At the same time, the telecom regulator RATEL has launched the long-awaited 5G spectrum auction as of September 2025, setting a starting price of €100 million per frequency block. All three operators (Telekom, Yettel, and A1) are expected to participate, with the government poised to secure significant revenue. Telekom, however, appears most prepared: with equipment already procured and base stations in place, 5G service could go live immediately once licenses are granted. The synchronized timing of financing, licensing, and infrastructure readiness suggests that by early 2026, Telekom will have both the capital and regulatory clearance to proceed at full pace.

According to Lučić, Telekom’s first 5G services will debut in December 2025, followed by an accelerated rollout supported by global partners like Vodafone to ensure efficient procurement and deployment after launch. The company’s roadmap targets broad national coverage within two years and universal 5G access by the end of 2027, aligning precisely with Serbia’s preparations for Expo 2027. The plan is ambitious, and covering every city and rural region will require a dense network of macro and small cells, leveraging existing 4G and fiber assets that Telekom has already modernized. As Lučić noted, much of the “basic infrastructure has already been put in place,” enabling rapid deployment. By 2027, Serbia aims to establish a fully integrated connectivity platform; a 5G network powering smart cities at Expo, industrial automation, high-speed digital services, and public-sector transformation.

Strategic Implications for Serbia’s Connectivity Platform

Infrastructure Dimension: Building the Digital Core

The EXIM-backed financing gives momentum to Serbia’s digital foundation, turning the 5G rollout into the backbone of a broader connectivity platform. This is more than a telecom upgrade; it is the infrastructure on which Serbia’s digital economy will operate. The new network will provide greater capacity, ultra-low latency, and support for technologies like autonomous systems, smart grids, and real-time cloud applications. In essence, Serbia is laying new “digital rails” for its economy; the infrastructure that enables innovation across every sector. The European Investment Bank highlighted that expanding 5G and ultrafast broadband will “accelerate the digital transformation of the Serbian economy” and remains a top priority within Serbia’s Digital Agenda. Telekom Srbija’s ambition to become a telecom of the future reinforces this logic: its network is meant to power a wider digital ecosystem, from streaming and cloud platforms to e-health and smart mobility.

Economic Dimension: Investment and Growth Catalyst

Economically, Serbia’s 5G rollout represents a substantial inflow of investment capital — combining the European Investment Bank’s €70 million loan, the anticipated $50 million financing from the US EXIM Bank, operator investments, and forthcoming spectrum-auction revenues that together are expected to exceed one hundred million euros. This investment will have multiplier effects: infrastructure construction will boost domestic contracting, create jobs in engineering and IT, and stimulate local suppliers. But its reach goes further. Strong digital infrastructure enhances Serbia’s appeal to investors and innovators alike. Reliable 5G coverage will attract startups and high-tech firms in fields like fintech, agritech, logistics, and Industry 4.0 manufacturing. With a modern network, rural communities gain access to e-commerce, telemedicine, and digital education, while entrepreneurs gain the tools to innovate from anywhere in the country. Favorable loan terms also allow Telekom Srbija to keep prices accessible, encouraging widespread adoption and maximizing the economic benefits. The next step, however, will be to pair this infrastructure with digital skills, R&D incentives, and entrepreneurship programs, ensuring that connectivity translates into real economic transformation.

Geopolitical and Strategic Dimension: Balancing Power and Sovereignty

The US EXIM Bank’s involvement signals a significant geopolitical shift. For the first time, Washington is directly financing Serbia’s digital infrastructure, which is a notable move in a sector where China, through Huawei, once dominated. Alongside the EIB, EXIM’s engagement anchors Serbia’s digital development closer to the Western ecosystem. This alignment subtly reinforces Serbia’s commitment to security standards agreed under the 2020 Washington Agreement, including the exclusion of high-risk 5G vendors. By diversifying both financiers and suppliers, Serbia is advancing connectivity sovereignty, ensuring that no single foreign actor holds structural control over its digital backbone.

Regulatory and Market: Dimension Competition and Governance

Serbia’s 5G rollout now moves into a critical regulatory phase. The RATEL spectrum auction, with starting bids of €100 million per license, will test both operator capacity and state strategy. Telekom Srbija, armed with EXIM and EIB financing, is clearly positioned to lead, but Yettel and A1 Srbija must also secure licenses to remain competitive. Both are backed by powerful international groups (e& and, Telekom Austria) which could bring additional investment. The regulator’s challenge will be maintaining a level playing field, ensuring that Telekom’s state-backed advantage does not distort fair competition. At the same time, the state’s dual role, as both owner and policymaker, requires careful separation of interests to align with EU digital single market principles. Policymakers may also attach coverage obligations to licenses, ensuring that 5G extends beyond urban centers into smaller towns and rural areas. If regulation remains transparent, pro-competition, and innovation-friendly, Serbia can achieve both goals: a rapid rollout led by a strong national operator, and a market that continues to foster diversity, innovation, and consumer benefit.

Risks and Constraints: Balancing Ambition with Realism

Even with strong financing and clear political backing, Serbia’s 5G rollout remains a complex and high-stakes endeavor. The EXIM ($50 million) and EIB (€70 million) loans provide critical capital, but when combined with steep spectrum auction fees, they also create a significant financial burden for Telekom Srbija. As a state-owned company, any financial underperformance could ripple back to public finances. If the uptake of 5G services lags behind expectations, whether due to slow consumer adoption or limited commercial applications, Telekom could face repayment pressure just as it scales one of the most capital-intensive projects in its history. Execution risk is equally high: reaching nationwide 5G coverage by 2027 is an ambitious target that hinges on synchronized progress in spectrum licensing, procurement, and local permitting. Any bureaucratic delays or supply chain bottlenecks could derail Serbia’s ability to demonstrate full 5G readiness by Expo 2027. Managing the logistical side, which consists of thousands of base stations, backhaul upgrades, and contractor coordination, will demand both disciplined project oversight and reliable technical partners.

From a market perspective, unequal investment capacity among operators introduces additional risk. Telekom’s advantage in accessing favorable state-backed financing could allow it to outpace Yettel and A1, potentially creating a temporary dominance in the 5G segment. Such an imbalance may discourage competition or innovation, while the opposite extreme, if all operators overinvest simultaneously, could spark a price war that undermines profitability across the sector. On the consumer side, success will depend on adoption rates. 5G will only gain traction if users see practical value in its applications, from smart homes and cloud-based tools, and if devices and plans remain affordable. Without visible improvements in speed, reliability, or digital services, mass adoption could be slower than anticipated.

Vendor selection and technology integration pose yet another set of challenges. Serbia’s intent to maintain a multi-vendor approach, with balancing European suppliers like Ericsson and Nokia with legacy Huawei components and possibly Open RAN systems, increases resilience but also complicates integration and maintenance. A fragmented vendor ecosystem can lead to compatibility issues, security vulnerabilities, or operational inefficiencies if not properly managed. Cybersecurity is perhaps the most enduring risk. A nationwide 5G platform will handle immense volumes of sensitive public and private data, making it an attractive target for espionage or cyber sabotage. Telekom Srbija’s existing partnerships with US and Israeli firms strengthen defense capacity, but continuous regulatory vigilance and full alignment with EU 5G security standards will be crucial. At the same time, Serbia must enforce data sovereignty, ensuring that critical government and citizen data are stored and processed under national jurisdiction, particularly when using foreign cloud or core infrastructure providers.

Ultimately, Serbia’s 5G journey is not just about connectivity. It is about control, capability, and credibility. The success or failure of this effort will define the country’s digital sovereignty for decades to come.

Anchoring Serbia’s Digital Future in a Western Strategic Trajectory

The EXIM–Telekom Srbija agreement is more than an investment; it’s a declaration of Serbia’s direction. By aligning with US and European partners, Serbia is not just building a 5G network; it is anchoring its digital future within the Western strategic orbit. The deal signals confidence, trust, and a clear shift toward transparent, rules-based cooperation. Through Western-backed financing, open procurement, and adherence to EU digital and security frameworks, Serbia is positioning itself as a credible, connected actor between the Balkans and the transatlantic community.

Yet this progress demands vigilance. Serbia must ensure that sovereignty and security remain at the center of its digital transition, carefully managing lingering exposure to Chinese vendors and ensuring that no foreign actor holds disproportionate leverage. It is essential to preserve both strategic autonomy and investor trust.

If Serbia sustains this balance between openness and sovereignty, its 5G platform will not only power the economy but also cement its place in Europe’s connected future, where digital infrastructure becomes a bridge to shared growth, innovation, and strategic stability.