2010 Croatia - Telecoms, Mobile, Broadband and Forecasts

Publication Overview

This report covers trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including VoIP and IPTV developments. Subjects include:

• Market and industry analyses, trends and developments;
• Facts, figures and statistics;
• Industry and regulatory issues;
• Infrastructure;
• Major players, revenues, subscribers, ARPU;
• Internet, VoIP, IPTV;
• Mobile voice and data markets;
• Broadband (FttH, DSL, cable TV, wireless);
• Convergence and digital media.

Researcher:- Paul Kwon
Current publication date:- October 2010 (9th Edition)
Next publication date:- October 2011

Executive Summary

An EU future beckons for Croatia's telecoms market

Croatia has prospered due to its close relationship with the European Union although its ambition of EU ascension has taken longer than anticipated. Close economic ties with both EU and non-EU nations are evident; principal export partners are Germany, Bosnia-Herzegovina and Italy, while its main import sources are Italy, Germany and Russia.

The global financial crisis affected Croatia due to reduced capital inflows and a drop in export demand. This was coupled with a large current account deficit, a high level of external debt, as well as significant exposures to interest and exchange rate risks. The collapse in market confidence coincided with real GDP contraction of 5.8% during 2009. The EU forecasts a further 0.5% contraction during 2010 before expanding again in 2011 by 2%.

The overall telecoms industry has weathered the economic turmoil relatively well due to the essential nature of most telecom services although it has been impacted by initiatives such the imposition of a tax to improve the state budget and decreased demand for services.

Following market liberalisation alternative operators have made inroads into the fixed telephony market, with the incumbent’s market share slipping below 80% of total subscribers and revenue. To ensure fair competition, the regulator has introduced a number of regulatory measures including reducing the incumbent’s rates for call termination as well as improving access to the incumbent’s last mile network.

Broadband services are widely available and DSL is the dominant form of broadband access, with competing services available via cable, Fibre-to-the-Home, and wireless broadband. Recognising the potential of applying ICT to improve both social and economic development, Croatia has taken steps to develop a knowledge-based society, encompassing education, health and government services. A healthy digital TV market is evident, with content accessible via cable TV, satellite and broadband TV. Bundled offerings such as triple play have been launched by the cable operators and the telecoms incumbent.

Croatia’s mobile market is one of the most highly penetrated in the Balkans region with services offered by three mobile network operators. With the mobile voice market at near saturation levels, the established mobile network operators have focused on improving ARPU levels by encouraging prepaid subscribers to migrate to postpaid plans as well as encouraging take up of mobile broadband services based on deployed 3G/HSPA networks.

Market highlights:

• The regulator has insisted the incumbent offer bitstream access on its deployed fibre access networks, potentially threatening future deployments.
• Fixed broadband penetration is rising on the back of increasing availability; competing platforms include cable, FttX and WiMAX as well as regulatory-based measures such as local loop unbundling and bitstream access. Future broadband growth is assured given the large remaining number of Internet subscribers not using broadband platforms.
• Analogue switch-off commenced in January 2010. To assist in the switch-off a DVB-T receiver purchase subsidy has been made available to all households.
• Strong mobile broadband growth rates highlight this growth opportunity to the saturated mobile market. Competition has led to tariff cuts and increased bundled data allowances, improving value for end users.

Croatia broadband and telecoms statistics – 2010 -2011

(Source: BuddeComm based on industry data)

Data in this report is the latest available at the time of preparation and may not be for the current year.

Table of Contents

• 1. Key Statistics
• 2. Telecommunications Market
  • 2.1 Overview of Croatia’s telecom market
• 3. Regulatory Environment
  • 3.1 Background
  • 3.2 Regulatory authority
  • 3.3 Telecom sector liberalisation in Croatia
    • 3.3.1 Privatisation
    • 3.3.2 Interconnect
    • 3.3.3 Access
    • 3.3.4 Number portability (NP)
    • 3.3.5 Carrier PreSelection (CPS)
• 4. Fixed Network Market
  • 4.1 Overview
  • 4.2 T-Hrvatski Telekom (T-HT)
  • 4.3 Optima Telekom
  • 4.4 Metronet
• 5. Telecommunications Infrastructure
  • 5.1 Overview
  • 5.2 Telecoms and IT
  • 5.3 Wholesaling
    • 5.3.1 Overview
• 6. Internet Market
  • 6.1 Overview
  • 6.2 Internet statistics
• 7. Broadband Market
  • 7.1 Overview
  • 7.2 Broadband statistics
  • 7.3 Asymmetrical Digital Subscriber Line (ADSL)
  • 7.4 Cable modems
  • 7.5 Fibre-to-the-Home (FttH) networks
  • 7.6 Wireless broadband
    • 7.6.1 WiFi
    • 7.6.2 WiMAX
• 8. Digital Economy / Digital Media
  • 8.1 Croatia’s emerging Internet economy
    • 8.1.1 Overview
    • 8.1.2 E-government
    • 8.1.3 E-education
    • 8.1.4 E-health
  • 8.2 Broadcasting market
    • 8.2.1 Overview
    • 8.2.2 Regulatory issues
    • 8.2.3 Digital TV
• 9. Mobile Communications
  • 9.1 Overview of Croatia’s mobile market
    • 9.1.1 Mobile statistics
  • 9.2 Regulatory issues
    • 9.2.1 Third GSM licence and 3G licences
    • 9.2.2 Fourth GSM licence
    • 9.2.3 Mobile number portability (MNP)
    • 9.2.4 Mobile Tax
    • 9.2.5 Network interconnection
  • 9.3 Mobile technologies
    • 9.3.1 Digital
    • 9.3.2 Third generation (3G) mobile
  • 9.4 Major mobile operators
    • 9.4.1 T-Mobile Hrvatska
    • 9.4.2 VIPnet
    • 9.4.3 Tele2 Croatia
    • 9.4.4 Mobile Virtual Network Operators (MVNOs)
  • 9.5 Mobile voice services
    • 9.5.1 Prepaid cards
  • 9.6 Mobile data services
    • 9.6.1 Short Message Service (SMS)/Multimedia Messaging Service (MMS)
    • 9.6.2 General Packet Radio Service (GPRS)
    • 9.6.3 Enhanced Data for GSM Evolution (EDGE)
    • 9.6.4 BlackBerry
    • 9.6.5 Mobile broadband
    • 9.6.6 Mobile TV
  • 9.7 Mobile content and applications
    • 9.7.1 Overview
    • 9.7.2 M-commerce
• 10. Forecasts
  • 10.1 Forecasts – fixed broadband subscribers – 2010 - 2013; 2020
    • 10.1.1 Scenario 1 – higher broadband subscriber growth
    • 10.1.2 Scenario 2 – lower broadband subscriber growth
• 11. Glossary of Abbreviations

• Table 1 – Country statistics Croatia – 2010
• Table 2 – Telephone network statistics – 2010
• Table 3 – Internet user statistics – 2010
• Table 4 – Internet subscriber statistics – 2010
• Table 5 – Broadband subscriber statistics – 2010
• Table 6 – Mobile statistics – 2010
• Table 7 – National telecommunications authority
• Table 8 – Call termination on the incumbent’s fixed network – October 2009
• Table 9 – Cost of LLU and shared access lines – January 2010
• Table 10 – T-Hrvatski Telekom financial data – 2009 - 2010
• Table 11 – T-Hrvatski Telekom fixed lines by type – 2005 - 2010
• Table 12 – Optima Telekom financial data – January – June 2010
• Table 13 – Fixed lines in service and teledensity – 2000 - 2011
• Table 14 – Workplace network usage by network type – 2008 - 2010
• Table 15 – T-HT unbundled local loops – 2007 - 2010
• Table 16 – Internet users, subscribers and penetration rates – 2000 - 2011
• Table 17 – Fixed broadband subscribers and penetration rate – 2003 - 2010
• Table 18 – T-HT ADSL subscribers and ARPU – 2002 - 2010
• Table 19 – Online purchases by individuals – 2007 - 2010
• Table 20 – Electronic sales as percentage of total non-VAT turnover for non-financial sector businesses with 10 or more employees – 2009
• Table 21 – Uptake of e-government services by businesses – 2007 - 2010
• Table 22 – Uptake of e-government services by individuals – 2008 - 2010
• Table 23 – E-education usage by individuals – 2007 - 2010
• Table 24 – E-education usage by businesses – 2009 - 2010
• Table 25 – Audience share by broadcaster – prime time – 2004 - 2010
• Table 26 – Audience share by broadcaster – all day – 2004 - 2010
• Table 27 – Total TV advertising spending – 2004 - 2009
• Table 28 – MAXtv subscribers – 2006 - 2010
• Table 29 – Cable TV subscribers – 2005 - 2010
• Table 30 – Mobile subscribers and penetration rate – 1997 - 2011
• Table 31 – Mobile Termination Rates – October 2009
• Table 32 – T-Mobile revenue and ARPU – 2004 - 2010
• Table 33 – T-Mobile customers – 2007 - 2010
• Table 34 – VIPnet financial data – 2004 - 2010
• Table 35 – VIPnet prepaid, postpaid and blended monthly ARPU – 2004 - 2010
• Table 36 – VIPnet subscribers and Minutes of Use (MOU) – 2007 - 2010
• Table 37 – Tele2 financial data – 2007 - 2010
• Table 38 – Tele2 subscribers – 2007 - 2010
• Table 39 – Total prepaid users – 2002 - 2010
• Table 40 – T-Mobile prepaid subscribers – 2001 - 2010
• Table 41 – VIPnet prepaid subscribers – 2004 - 2010
• Table 42 – Total SMS and MMS messages sent – 2003 - 2010
• Table 43 – Total mobile broadband subscribers – 2007 - 2010
• Table 44 – VIPnet mobile broadband subscribers – 2008 - 2010
• Table 45 – Forecast fixed broadband subscribers – higher growth scenario – 2010 - 2013; 2020
• Table 46 – Forecast fixed broadband subscribers – lower growth scenario – 2010 - 2013; 2020

• Exhibit 1 – The EU regulatory framework for communications
• Exhibit 2 – Access and the local loop
• Exhibit 3 – BlackBerry services defined