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Croatia - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. Croatia's telecommunications market is being progressively liberalised in line with the country's commitments to the World Trade Organisation (WTO) agreement signed in 2000 requiring member states to open their telecommunications sectors to competition. Croatia also harbours ambitions of joining the European Union (EU) by 2010; to be successful, the country's telecommunications market will need to be completely liberalised and all legislation should mirror that adopted in existing EU member states. Croatia's fixed network services market was opened to competition at the end of 2002, although incumbent fixed-line operator T-Hrvatske Telekom was not legally required to surrender access to its local loop network until January 1, 2005. In the meantime, a large number of value-added network service providers and a handful of (mostly) localised Internet service providers (ISPs) began offering commercial services in competition with T-Hrvatske Telekom. Nevertheless, in early-2004, the Croatian authorities began soliciting expressions of interest in applications for a second national fixed-line operator licence. In November 2004, the licence was awarded to Optima Telekom, a subsidiary of the privately-owned Optima Group, which offers telecommunications equipment and solutions to corporate customers. The company has since introduced a range of next-generation, broadband enterprise, and residential communications services and served 205,000 customers as of late-2007. At least 20 other operators have received fixed-line licences in Croatia, among them the state broadcaster, wireless operator VIPnet, and new entrants H-1 Telekom and the WiMAX Telecom group. However, it is only now that T-Hrvatske Telekom is beginning to face significant competition in the fixed-line market, as the localised cable TV operators have begun to consolidate (the largest entity to emerge so far is B.Net Hrvatske), and the fixed-line operators augment their Internet and broadband offerings though acquisitions of smaller players (Metronet has recently acquired ChaosNet and Vodatel). Meanwhile, the national rail and power companies - Hrvatske Zeljeznice (HZ) and Hrvatske Elektroprivreda (HEP) - have yet to seriously move forward with plans to combine and commercialise their nationwide private communications networks. The mobile communications market is exposed to minimal competition, with just two operators serving the bulk of the country's approximately 4.63 million customers at the end of June 2007. The third operator was licensed in December 2004 as a joint venture between Sweden-based Tele2 AB and a number of local investors; the business is now wholly-owned by Tele2 AB. The operator secured a 20-year combined GSM 1800 and third-generation (3G) universal mobile telecommunications system (UMTS) licence and began offering commercial services in October 2005. Two other 3G UMTS licences were offered in 2004, one of which went to GSM operator VIPnet. The third licence was awarded to T-Mobile Hrvatske, the wholly-owned but independently-managed subsidiary of T-Hrvatske Telekom. According to the Telecommunications Council, T-Hrvatske Telekom had been legally identified as the operator with significant market power (SMP) in the public voice telephony, tie lines, and Internet services markets, while T-Hrvatske Telekom and VIPnet Ltd had been designated as operators with SMP in the mobile services market since September 2002. These designations had not changed as of late-2007, but Croatia must make more detailed analyses of its telecommunications services market in line with EU regulations ahead of its accession to the EU, and it is possible that SMP designations will change as a result of these analyses. A new Telecommunications Law was adopted in the summer of 2003, which provided for the establishment of a new independent regulator, the Croatian Telecommunications Agency. The new regulator was set up at the beginning of 2004, although it took most of the year for the agency to get fully up to speed. The agency is now working to open up the fixed-line sector to competition, as regulations governing interconnection, number portability, carrier pre-selection, and local loop unbundling took effect on January 1, 2005. Liberalisation is moving slowly, however, as T-Hrvatske Telekom does not always move rapidly in unbundling its local loop on request and the regulator has been somewhat lax in forcing the incumbent to comply with the law.
This Market Intelligence Report was produced as part of
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