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Croatia Telecommunications Report Q1 2011
Business Monitor International, Nov 2010, Pages: 83
The Croatia Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Croatia's telecommunications industry.
BMI’s Q111 update to Croatia’s Telecommunications Report boasts some revised forecasts for the fixedline, internet/broadband and mobile communications markets that are informed by actual Q210 key performance indicators from the regulator and the principal market players, as well as some limited data relating to Q310. We have also extended our forecasts through to 2015.
Revised Q210 data from Tele2 and Vipnet showed that there is still some room for organic growth in the Croatian mobile market, particularly at the lower end, where we would normally expect to see a thriving community of mobile virtual network operators. That no such MVNOs have yet emerged suggests that few see many opportunities in a field where low-cost operator Tele2 prevails. Indeed, Tele2 was the primary growth engine in H110, its contribution undermined by weak growth at Vipnet and continued negative growth at T-Mobile. Despite attractively priced promotions and an increased resort to bundling, we no longer see significant growth opportunities in Croatia and we now expect more temperate increases in subscriber numbers, which are forecast to reach 6.291mn by 2015.
Looking ahead, we believe that operators will become more focused on attacking each other's customer bases while also striving to migrate prepaid customers to higher value postpay plans or affordable mobile broadband packages. Upgrading of networks with 3.5G HSPA+ technology while also trialling so-called 4G LTE technology will certainly improve the mobile broadband experience for users, but BMI is far from convinced that this will translate into additional spending on such services.
There are better opportunities in the broadband arena although xDSL-based services appear to be losing their appeal to more mobile-minded users, while the slow growth of the cable market means there is even less potential for broadband growth in that area. Mobile broadband user numbers grew by 45.6% in the year to June 2010, much faster than the 20.3% rise in fixed connections, but it will be two or three years before mobile broadband connections outnumber fixed accesses, unless there is a real swing towards lowcost prepaid mobile broadband.
The fixed broadband market is being held back by shrinkage in the fixed-line telephony market. xDSL utilises the last-mile copper PSTN of incumbent T-HT and alternative players such as Optima Telekom. With T-HT's PSTN customer base continuing to decline rapidly and with many alternative players still reliant on the T-HT network, the outlook for fixed broadband is not particularly rosy. We have revised our fixed-line forecasts downwards and now expect a subscriber base of 1.711mn by 2015, a penetration rate of 39.1%.
Despite a worsening economic picture, Croatia remained in 10th place in BMI's regional Business Environment Rating comparison this quarter. However, it may yet slip down the chart once our bleaker outlook for the mobile sector really takes hold.
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