2013 Croatia - Telecoms, IP Networks, Digital Media and Forecasts

Fibre deployment encouraged by amended wholesale pricing

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 sectors in one of Central Europe’s more Europe’s smaller and more dynamic markets. The report includes regulator’s market data to Q3 2013; telcos’ operating and financial data to September 2012; market developments to early 2013.

Economic background

Croatia’s economy saw cumulative negative GDP growth of 9% between 2009 and 2012, while further contraction is expected into 2013 as the recession (exacerbated by the economic instability of key trading partners) continues. GDP is expected to have fallen 1.8% in 2012, with reduced industrial production exacerbating one of the highest unemployment rates in the region. This has hobbled the government’s ability to meet its commitments in a raft of areas. For consumers, the sum effect has been a reduction in personal consumption, including all but the essential telecom services, resulting in lower revenue for telcos.

Broadband market overview

Internet penetration in Croatia is the highest in the Balkans region. Despite the increase in subscriber numbers, Croatia’s broadband market remains a significant growth opportunity for ISPs, with fewer than half of households subscribed to broadband services ISPs have focused on increasing broadband uptake, with hopes of generating additional revenue through sales of IPTV) and bundled offerings. In late 2012 the regulator selected a number of telcos to receive funding to deploy broadband networks in remote and rural areas.

Mobile market overview

Croatia’s mature mobile market has one of the highest penetration rates in the region. Three MNOs offer services, while MVNOs thus far they have had little impact on overall competition. Competition among MNOs together with regulatory measures on roaming and termination tariffs led to a fall in mobile services revenue in 2012. This trend, particularly in the greater consumer use of services following operator investments in LTE, is set to continue in coming years.

Key telecom parameters – 2010; 2013

(Source: BuddeComm)

Market Highlights

• Rationalisation of the definition of mobile subscribers resulted in a large number of subscribers being removed from operator databases during 2011.
• In late 2011 Parliament abolished the 6% fee on revenues generated by mobile services imposed in 2009 as part of the government’s response to Croatia’s economic crisis.
• VIPNet and T-HT have launched LTE services in a bid to develop the revenue potential of mobile broadband and associated services.
• In mid-2012 the 6% tax on mobile services revenue was abolished. The tax is estimated to have reduced investment in the mobile sector, as well as lowered operator revenue while providing an estimated HRK300million annually for the state.

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.