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Croatian incumbent in talks with regulator on fibre rollout

Croatia' s fixed-line market is stable and remains relevant despite low penetration, according to incumbent operator T-Hrvatski Telekom (T-HT), which is now looking to the next level: Fibre rollout.

However, as with other European markets, the telco is battling with a regulatory regime that it claims will not safeguard its interests regarding next-generation network investment.

We are rolling out fibre-to-the-home and building, and we are "discussing with the regulator," T-HT CEO Ivica Mudrinic told Total Telecom in a recent interview.

The key issues on the table are local loop unbundling (LLU) and the relationship between T-HT and its competitors, especially with regard to "so-called bitstream access", Mudrinic explained.

"We need a clear business case and a clear rate of return," he said. At present, "it's not reasonable enough." As in many European countries, "the wholesale level for bitstream access is too low."

However, Mudrinic was unable to shed any light on when he expects the situation to be resolved. "It's still under discussion," he said.

Growing demand for high-speed Internet and TV services is offsetting the decline in T-HT's fixed-line business.

IPTV in particular has "given the fixed line relevance... and has kept the fixed-line business quite stable," said Mudrinic. "The fixed-line business is quite a sound business in Croatia."

The telco is facing increasing competition in its core business though. While it is diversifying into the TV space, the country's cable operators are now able to offer triple-play services, competing with the incumbent in the provision of voice and Internet services.

Nonetheless, Mudrinic said T-HT has retained a fixed market share of 85%-90%, noting that the fixed minutes it has lost have mostly gone to the mobile operators - itself included - rather than the fixed altnets.

"We have roughly half the [mobile] market revenue share," Mudrinic said.

The company competes with Telekom Austria subsidiary Vipnet (which also runs its own low-cost brand, Tomato) and Tele2.

With three operators and four brands, there is a significant amount of competition, especially at the low end, Mudrinic admitted. And "the level of competition has increased significantly over the last couple of years."

Furthermore, with penetration standing at 137%, "it's highly saturated," he added, noting that excluding multiple SIMs, real penetration is probably somewhere around the 80% mark.

However, there are ways for the incumbent to differentiate itself from its rivals, one of which is the iPhone.

"That has driven data usage significantly," said Mudrinic, brandishing his own Apple handset.

The operator is also diversifying by offering mobile broadband - it hasn't released subscriber figures but says it is tracking growth very carefully - and by selling mobile broadband subscriptions bundled with netbooks.

Again, there are no numbers available, but the netbook offer has "gone over very well," Mudrinic said.

Источник: Total Telecom

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