2015 Croatia - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Telekom Austria expands interest in Croatian ISP market

The Croatian telecoms market has been shaped by the country’s bid to join the European Union, which resulted in market liberalisation and the creation of a regulatory environment conducive to competition. Having acceded to the Union in July 2013, the fortunes of the country’s economy has been closely tied with those of its principal trading partners. The faltering economy in recent years is only now beginning to show positive growth, having suffered about six years of successive falls in GDP. This has impacted on consumer spend on services and strained telecom sector revenue. The government has also imposed taxes on telecom services and increased annual spectrum fees in a bid to reduce State debt.

Nevertheless, there is investment activity, particularly in developing fixed-line broadband infrastructure and expanding LTE networks. This has resulted in considerable growth in customer take-up of bundled services, as also in mobile data. By mid-2016 the transmission company OiV is expected to have completed work on amalgamating the fibre networks of seven state-owned road, rail and other infrastructure providers into a single open-access network covering about 75% of the country. The surplus fibre-based capacity will be available to ISPs on an open access wholesale model, and will go far to extending broadband to rural and underdeveloped areas.

Internet penetration in Croatia is the highest in the Balkans region, partly the result of low access pricing and effective competition between the DSL and cable platforms. There is also a vibrant market for FttX, though still predominantly deployed in urban areas. The country was among the first in Europe to complete the switch from analogue to digital broadcasting, and the current migration to the DVB-T2 standard, expected to be complete by 2020, will provide addition spectrum for mobile broadband use.

Croatia’s mobile market also has one of the highest penetration rates in the region. The market is dominated by the local divisions of the pan-regional operators Telekom Austria, Deutsche Telekom and Tele2, though there is room for a number of MVNO. These operators have successfully encouraged prepaid subscribers to migrate to higher-ARPU postpaid plans in recent years, and have developed revenue from mobile data services.

This report provides a concise overview of Croatia’s fixed-line market, covering recent regulatory developments, fixed-line infrastructure, and the financial and operating performance of the major telcos. The report also analyses the fast-developing broadband and digital media markets, offering a variety of statistics as well as forecasts for fixed-line broadband subscribers. In addition it reviews the mobile voice and data sectors, assessing network developments and emerging technologies, and examining a range of mobile services including m-commerce and mobile TV.

Key developments:

• Regulator plans deregulation of the retail broadband and IPTV services markets;
• T-HT takes over management of Optima Telekom to 2018;
• GDP shows first signs of recovery;
• State transfers remaining shares in T-HT to Pensioners’ Fund;
• T-HT invests in cloud computing;
• VIPnet acquires three regional cablecos and Amis Telekom;
• DVB-T2 to be deployed by 2020, releasing addition spectrum for mobile broadband use;
• GTS Central Europe extends fibre network through Croatia, is sold to Deutsche Telekom;
• LTE services now widespread as smartphone use increases;
• Regulator allocates remaining 800MHz spectrum;
• Report update includes the regulator’s market data to June 2015, telcos’ operating and financial data to Q3 2015, recent market developments

Companies mentioned in this report:

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