According to BMI, Bosnia's telecoms market is behind the majority of markets in Central and Eastern Europe offering strong growth prospects for operators as competition outside traditional concession areas begins to improve. In the longer term, there are benefits for subscribers as competition drives down prices, making services more affordable. The three incumbent operators'' expansion also provides opportunities for equipment vendors to the extend networks beyond historical borders. Complications in the development of the telecoms market is largely the result of the country being split into two distinct political regions, the Federation of Bosnia & Herzegovina (FBiH) and the Republika Srpska. Greater presence of the regulator in the market through the introduction of new services such as mobile number portability also bode well for Bosnia's telecoms development. While challenges remain, the market has good medium-term growth potential.
Key Data
- BMI estimates growth in the first half of 2012 added 11,000 new subscribers. Our estimates remain lower than previously based on a downgrade of subscriber figures for third-ranked HT Mostar to reflect regulatory data.- New data from the regulator, CRA, showed Bosnia's fixed-line market to be declining faster in 2011 than 2010, with the rate of decline accelerating to 4.5%.- However, CRA data for the fixed broadband market showed strong growth, with total subscriptions increasing 39.2% to reach 430,247 at YE11.Key Trends & Developments
The implementation of mobile number portability (MNP) is expected to have an impact on market dynamics as operators reach into new concession areas and begin to compete more aggressively. As prices fall, we expect this to bring new subscribers into the market. The roll-out of MNP was held up by the CRA taking legal action against third-ranked HT Mostar for failing to launch the service. A fine of BAM120,000 was imposed by the regulator in August 2012.
BH Telecom remains the largest operator across all segments and has the largest historical concession area, in the FBiH. Telekom Srpske is the second largest operator and is responsible for the second largest region, the Republika Srpska. Meanwhile, HT Mostar is the smallest incumbent operator, is active in Herzegovina and is the smallest of the three. However, the three mobile operators are increasingly competing outside their traditional concession areas, which BMI believes will help to drive further subscriber growth. Source; Fast Market Research