Croatia - Telecoms, IP Networks, Digital Media and Forecasts

Publication Overview

This report provides a comprehensive overview of trends and developments in Croatia’s telecommunications market. The report analyses the mobile, 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 forecasts to 2015;
• Broadband market forecasts for selective years to 2020. 

Key developments:

VIPNet extend 42Mb/s HSPA+ services to four cities; LTE trials in the 800MHz band underway – commercial launch in 2012; parliament abolishes 6% tax on mobile services revenue; T-HT authorized to manage e-money services; MAXtv extends to satellite platform; Novi-Net granted national WiMAX licence; IPTV among the more successful in Central and Eastern Europe; B.Net was bought by Telekom Austria; DVB-T2 to be employed in two MUXES in 2012; T-HT negotiates for amended wholesale fibre pricing; H1 Telekom launches IPTV service; GDP shows moderate rise in 2011; state transfers remaining shares in T-HT to Pensioners’ Fund; regulator’s market data to Q3 2011; operator data to September 2011.

Companies covered in this report include:

VIPNet, Tele2 Croatia, T-HT, B.net, Digi TV, SBB, H1 Telekom, Optima Telekom, Metronet.

Researcher:- Henry Lancaster
Current publication date:- January 2012 (11th Edition)

Executive Summary

Croatia’s needs regulated fibre wholesale pricing model to kick-start the internet economy

BuddeComm’s annual publication, Croatia - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Europe’s smaller and more dynamic markets.

Croatia’s accession to the European Union in mid-2004 was followed by a period of strong economic growth and integration, with the privatisation of most of the economy and stronger ties formed with its main EU trading partners. The global financial crisis from late 2008 deeply affected Croatia, mainly due to 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. Real GDP contracted by about 5.8% in 2009 and a further 1.9% in 2010, while GDP growth in 2011 is expected to reach only about 0.8%. Although public debt was estimated to have reached 51% of GDP in 2011 the government has developed few significant growth enhancing reforms, which has hindered the country’s economic recovery and investment in infrastructure. High inflation is compounded by unemployment approaching 17%.

Membership to the EU was the catalyst for the necessary reform of Croatia’s telecom market. As part of EU entry requirements, the market was liberalised and the incumbent, T-Hrvatski Telekom (T-HT), privatised. This process has resulted in a range of alternative operators entering the market, while the regulator has taken steps to ensure fair competition through implementing a number of measures based on European Commission guidelines.

Broadband penetration is on a par with the EU average. Effective cross-platform competition exists in the broadband market, with dominant DSL complemented by cable, FttX and WiMAX as well as emerging mobile broadband options. ISPs have focused on increasing broadband uptake, generating additional revenue through offering bundled services.

Croatia possesses a well developed mobile market, with penetration rates among the highest in the region. Three mobile network operators offer services, while there is as yet only a minor MVNO presence. Given the high voice penetration, operators have focused on improving ARPU by encouraging prepaid subscribers to migrate to postpaid plans as well as by upgrading networks to encourage consumer use of high-end mobile data offerings.

In the digital media sector, the satellite and cable TV markets remain underdeveloped by European standards, with cable TV household penetration at 10% and IPTV penetration at 23%. DTTV is available nationally, with the country’s ASO process reached two months ahead of schedule. About 60% of TV viewers access DTTV. Digital TV programming is also available via cable TV and satellite TV.

Key telecom parameters – 2010 – 2012

(Source: BuddeComm) 

Market Highlights

• Mobile revenue continues to be affected by falling prices for voice services and regulated roaming tariffs, though the scrapping of the 6% mobile services tax effective from 2012 will ease the burden on operators and consumers.
• Having trialled LTE in the 800MHz, 2.1GHz and 1800MHz band, MNOs expect to launch commercial services later in 2012. VIPNet plans to assign 10% of its investment to or the platform, which will facilitate rural mobile broadband given the spectrum’s propagation characteristics.
• The regulator planned to auction frequencies suitable for 4G services, including the 700MHz-800MHz digital dividend, during 2012.
• The purchase of Croatia’s largest cable company, B.net, by Telekom Austria, has added fixed broadband and pay-TV to the latter’s existing mobile portfolio, creating a strong bundled services player. B.net’s network is largely upgraded with DOCSIS3.0 technology, potentially scaleable up to 400Mb/s.
• ASO was completed in late 2010, assisted by government subsidies for STBs available to all households. Digital dividend spectrum has been made available for mobile broadband services, and so closing the digital divide for rural areas in coming years. Currently, DTTV accounts for 60% of TV viewing.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Croatia. It provides further information on:

• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Mobile data market developments in coming years in light of spectrum auctions and new license awards;
• 3G developments, regulatory issues and technologies including HSPA and LTE;
• Broadband migration to an FttH architecture;
• Historical and current subscriber statistics and forecasts;
• ARPU statistics and forecasts.

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 EU regulatory framework
  • 3.3 Revised NFR
  • 3.4 Regulatory authority
  • 3.5 Telecom sector liberalisation in Croatia
    • 3.5.1 Privatisation
    • 3.5.2 Interconnect
    • 3.5.3 Access
    • 3.5.4 Number portability (NP)
    • 3.5.5 Carrier PreSelection (CPS)
• 4. Fixed Network Operators
  • 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 Overview
• 6. Internet Market
  • 6.1 Overview
  • 6.2 Internet statistics
• 7. Broadband Market
  • 7.1 Fixed broadband market
    • 7.1.1 Overview
    • 7.1.2 Broadband statistics
    • 7.1.3 Asymmetrical Digital Subscriber Line (ADSL)
    • 7.1.4 Cable modems
    • 7.1.5 Fibre-to-the-Home (FttH) networks
  • 7.2 Wireless broadband
    • 7.2.1 WiFi
    • 7.2.2 WiMAX
  • 7.3 Mobile broadband
• 8. Digital Media
  • 8.1 Overview of broadcasting market
    • 8.1.1 Regulatory issues
    • 8.1.2 Digital TV
  • 8.2 Croatia’s emerging internet economy
    • 8.2.1 Overview
    • 8.2.2 E-government
    • 8.2.3 E-education
    • 8.2.4 E-health
• 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 Spectrum auctions
    • 9.2.4 Mobile number portability (MNP)
    • 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-HT
    • 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 Evolved High Speed Packet Access (HSPA+)
    • 9.6.5 Long-term Evolution (LTE)
    • 9.6.6 Mobile TV
  • 9.7 Mobile content and applications
    • 9.7.1 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
    • 10.1.3 Notes on scenario forecasts
• 11. Glossary of Abbreviations

• Table 1 – Country statistics – 2011 (e)
• Table 2 – Telephone network statistics – September 2011
• Table 3 – Internet user statistics – 2011 (e)
• Table 4 – Internet subscriber statistics – 2011 (e)
• Table 5 – Broadband subscriber statistics – 2011 (e)
• Table 6 – Mobile statistics – 2011 (e)
• Table 7 – National telecommunications authority
• Table 8 – T-HT unbundled lines – 2008 - 2011
• Table 9 – Cost of LLU and shared access lines – 2010
• Table 10 – Ported numbers – 2005 - 2011
• Table 11 – T-HT CPS lines – 2008 - 2011
• Table 12 – Fixed-line market share by operator – 2008 - 2011
• Table 13 – T-Hrvatski Telekom financial data – 2009 - 2011
• Table 14 – T-Hrvatski Telekom revenue by sector – 9M 2010 – 9M 2011
• Table 15 – T-Hrvatski Telekom fixed lines by type – 2005 - 2011
• Table 16 – Optima Telekom financial data by sector– 2010 - 2011
• Table 17 – Optima Telekom financial data – 2010 - 2011
• Table 18 – Optima Telekom operational data – 2010 - 2011
• Table 19 – Fixed lines in service and teledensity – 2000 - 2011
• Table 20 – T-HT unbundled local loops – 2007 - 2011
• Table 21 – Internet users, subscribers and penetration rates – 2000 - 2012
• Table 22 – Fixed broadband subscribers and penetration rate – 2003 - 2012
• Table 23 – DSL accesses by type – Sep 2011
• Table 24 – T-HT ADSL subscribers and ARPU – 2002 - 2011
• Table 25 – Total mobile broadband subscribers – 2007 - 2012
• Table 26 – VIPnet mobile broadband subscribers – 2008 - 2011
• Table 27 – Audience share by broadcaster – prime time – 2004 - 2010
• Table 28 – Audience share by broadcaster – all day – 2004 - 2010
• Table 29 – Total TV advertising spending – 2004 - 2011
• Table 30 – TV market share by platform – Sep 2011
• Table 31 – MAXtv subscribers – 2006 - 2011
• Table 32 – Cable TV subscribers – 2005 - 2012
• Table 33 – Uptake of e-government services by businesses – 2007 - 2012
• Table 34 – Uptake of e-government services by individuals – 2008 - 2012
• Table 35 – E-education usage by individuals – 2007 - 2012
• Table 36 – E-education usage by businesses – 2009 - 2012
• Table 37 – Mobile subscribers and penetration rate – 1997 - 2012
• Table 38 – Mobile market share by subscribers – 2008 - 2011
• Table 39 – Mobile ported numbers – 2006 - 2011
• Table 40 – T-HT mobile revenue – 2004 - 2011
• Table 41 – T- mobile HT ARPU – 2004 - 2011
• Table 42 – T-HT mobile customers – 2007 - 2011
• Table 43 – VIPnet financial data – 2004 - 2011
• Table 44 – VIPnet prepaid, postpaid and blended monthly ARPU – 2004 - 2011
• Table 45 – VIPnet Minutes of Use (MOU) – 2007 - 2011
• Table 46 – VIPnet subscribers – 2007 - 2011
• Table 47 – Tele2 financial data – 2007 - 2011
• Table 48 – Tele2 subscribers – 2007 - 2011
• Table 49 – Total prepaid users – 2002 - 2012
• Table 50 – T-Mobile prepaid subscribers – 2001 - 2011
• Table 51 – VIPnet prepaid subscribers – 2004 - 2011
• Table 52 – Total SMS and MMS messages sent – 2003 - 2011
• Table 53 – Forecast fixed broadband subscribers – higher growth scenario – 2010 - 2013; 2020
• Table 54 – Forecast fixed broadband subscribers – lower growth scenario – 2010 - 2013; 2020

• Chart 1 – Fixed-line market share by operator – 2008 – 2011
• Chart 2 – T-Hrvatski Telekom financial data – 2009 – 2011
• Chart 3 – Total mobile broadband subscribers – 2007 – 2012
• Chart 4 – Mobile subscribers and penetration rate – 1997 – 2012
• Chart 5 – Mobile market share by subscribers – 2008 – 2011
• Chart 6 – VIPnet financial data – 2004 – 2011
• Chart 7 – VIPnet prepaid, postpaid and blended monthly ARPU – 2004 – 2011
• Chart 8 – Tele2 financial data – 2007 – 2011
• Chart 9 – T-Mobile prepaid subscribers – 2001 – 2011
• Chart 10 – VIPnet prepaid subscribers – 2004 – 2011

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