Executive summary
Continuing economic recovery needed to promote telecom sector growth
Bosnia-Herzegovina made remarkable economic progress since emerging from war in the 1990s to the financial turmoil of 2009. Since then the country’s economy has recovered, with GDP expected to reach at least 2.2% in 2011. Future economic prosperity relies to a great extent on the country’s integration with the European Union. In preparation for eventual membership, the country has sought closer integration with the EU and adopted a range of commitments to political, economic, trade, and human rights reform. It has also aligned its telecom policies and regulatory measures to prepare it to compete effectively within the EU.
The market has been liberalised and a regulatory framework created based on the EU’s regulatory framework for communications, promoting competition as the most efficient way to offer communications products and services. Ongoing introduction of secondary legislation by the regulator is slowly improving the regulatory environment. To this end, the regulator has promoted fixed-line and mobile number portability, reduced interconnection tariffs and allowed the three incumbent operators to provide services outside their original concession areas.
Although a number of fixed-line operators offer services the market is dominated by the three incumbent operators, which hold a combined market share of 99%. All three incumbents are subject to specific obligations designed to improve competition.
Internet services are available through the incumbents and alternative operators. Internet usage in Bosnia-Herzegovina is showing signs of significant growth on the back of competition and the improved availability of services.
The three mobile network operators (MNOs), each affiliated with one of the incumbent fixed-line operators, provide near-national coverage. Their networks, being upgraded to support services based on HSPA technology; will in coming years support broadband in rural areas where fixed-line infrastructure is insufficient. In addition, mobile data and mobile broadband offers will provide future revenue growth given the limited potential of mobile voice services.
Bosnia-Herzegovina telecoms statistics – 2010; 2012
Sector
| 2010
| 2012 (e)
|
|---|
Subscribers to telecoms services (thousand)
|
|---|
Fixed-line telephone subscribers
| 989
| 950
|
Broadband subscribers
| 360
| 480
|
Mobile phone subscribers
| 3,013
| 3,190
|
Telecom penetration by service
|
|---|
Fixed-line telephony
| 26%
| 23%
|
Broadband
| 9.5%
| 13.5%
|
Mobile phone
| 83%
| 85%
|
(Source: BuddeComm based on industry data)
Market highlights:
- Wholesale market conditions have improved since unbundling local loops came into effect in 2010, though the respective incumbents remain dominant players in their regions. Nevertheless, regulatory measures have encouraged other players to invest in their business models, which has helped drive down consumer prices.
- The regulator in 2011 fined eight telcos for failing to implement number portability, as also two MNOs. This has had the effect of establishing the regulator’s determination to pursue market liberalisation in line with EU principles.
- Market consolidation opportunities continue to attract foreign investors, including private equity firms. Economic recovery anticipated for 2011 and 2012 may reverse the slide in international investment seen in recent years.
- The 65% growth in the 3G subscriber base looks set to continue for the nest few years at least as subscribers respond to MNO investment in networks and technologies. Mobile broadband offers are seen as a key attribute to MNOs seeking to capitalise on these investments and realise revenue growth from an emerging sector.
- Although the legislative groundwork has been made to support the launch of MVNOs, this is not expected to be finalised until 2012, with MVNOs not appearing in the market until 2013. In the meantime, MNOs have expanded their offers to appeal to the low-cost sector traditionally associated with MVNOs and resellers.
- Recently deployed 3G networks allow mobile operators to services with download speeds comparable to fixed broadband offerings.
Henry Lancaster
September 2011
Data in this report is the latest available at the time of preparation and may not be for the current year.
This report provides a comprehensive overview of trends and developments in Bosnia--Herzegovina’s telecommunications market. The report analyses the mobile, Internet, broadband, digital TV and converging media sectors. Subjects include:
- Market and industry analyses, trends and developments;
- Facts, figures and statistics;
- Industry and regulatory issues;
- Infrastructure;
- Major players, revenues, subscribers, ARPU, MoU;
- Internet, VoIP, IPTV;
- Mobile voice and data markets;
- Broadband (FttH, DSL, cable TV, wireless);
- Convergence and digital media;
- 3G subscriber and mobile ARPU data;
- Broadband market forecasts for selective years to 2020.
