Bosnia - Telecommunications Industry Bosnia - Telecommunications Industry
Overview
Information about the sector’s regulatory framework and latest activities can be found the BiH Communications Regulatory Agency's (CRA) website.
Bosnia's telecommunications sector, similar to electric power production and other infrastructure, was divided along ethnic lines following the 1992-1995 war. In the Federation, service is split between the Sarajevo-based BH Telecom in Bosniak-majority areas and Mostar-based HT Mostar in Croat-majority areas, while Banja Luka-based Telekom Srpske’s fixed lines covers the entire territory of Republika Srpska.
Telekom Srpske was privatized in December 2006 via a sale to Telekom Srbija, the dominant fixed-line and mobile telephone provider of Serbia, whose government owns a controlling interest in the parent company. The Federation government owns controlling shares in BH Telecom and HT Mostar. The CRA awarded the three operators 4G licenses in April 2019. The mobile phone market currently is estimated to have around 98 percent market penetration. Telekom Srpske’s mobile phone subsidiary m:tel has been expanding steadily both in the Republika Srpska and in the Federation. BH Telecom’s subsidiary BH Mobile and HT Mostar’s Eronet still have dominant positions in their traditional market areas.
A notable development is the appearance of broadband Internet service deployed via cable television. In years to come, more providers will be able to offer a “triple package” of phone, internet and cable service.
The U.S. investment fund Kohlberg, Kravis, Roberts (KKR) became the largest U.S. investor in BiH with its purchase of United Group (SBB/Telemach) in 2014. In March 2019, BC Partners, a leading international investment firm, announced the completion of the acquisition of majority ownership of United Group from KKR, following the receipt of all necessary regulatory approvals. KKR retained a substantial minority stake in the company.
Bosnia and Herzegovina’s Communications Regulatory Agency (CRA) published data on the country’s communications markets for 2018, which revealed that mobile subscriber numbers increased by 1 percent. According to the regulator’s statistics, there were a total of 3.461 million mobile subscribers in the country at the end of 2018. BH Telecom remains the sector leader, accounting for 49 percent of the nation’s mobile subscribers at end of2018, with the other two network operators Telekom Srpske and HT Eronet retaining their second-placed and third-placed spots with 39.3 percent and 11.7 percent, respectively. At the end of 2018, there were six active mobile virtual network operators in Bosnia and Herzegovina. Though none have yet to make any real inroads in the market, Blicnet is the largest of the six companies, though with a small number of subscribers.
Total fixed line connections declined by 2.5 percent in 2018 to 740,807, with the nation’s three “dominant” operators – BH Telecom, MTel, and HT Mostar – controlling the majority (81 percent) of those between them. Number of Internet users in 2017 was 3.2 million users with Internet penetration at of 90 percent.
According to Business Monitor International's (BMI) Bosnia-Herzegovina Telecommunications Report, BiH’s telecom market remains one of the least developed in Central and Eastern Europe and as such represents a significant growth opportunity for operators and telecom equipment vendors. Meanwhile, BMI believes higher value services, especially mobile data and postpaid subscriptions, will be major growth drivers as operators attempt to capitalize on the improved outlook for economic growth.
Leading Sub-Sectors
Telecommunications equipment and services for the expansion of existing networks including mobile, fixed line, and broadband.
Opportunities
The aforementioned operators remain the best opportunity for marketing goods and services. Their near monopoly position in mobile telephone services will continue to generate sufficient revenues to finance expansion and modernize their networks.
The companies face the challenge of migrating from technologies traditionally supplied by Ericsson and Siemens to Internet-based technologies. All three incumbent operators have in their development plans the acquisition and deployment of the following technologies/services: IP/MPLS, VoIP, 3G, GRPS, EDGE, and UMTS. In addition, they are looking to expand existing broadband access networks, to include xDSL, Ethernet WAN, Ethernet Metropolitan Area Networks, Wi-Fi, W-LAN, among others.
The rapidly growing cable television sector also provides opportunities for investment. The liberalization of VoIP could signal the next big development in BiH and may present a significant business opportunity. The ISPs and cable television operators are expected to play a significant role in providing the VoIP service in the future.
In accordance with EU standards, all television stations in BiH must begin digital broadcasting, providing an opportunity for U.S. sale of digital broadcast and ancillary equipment. Five informative-technical centers throughout the country will be linked to public broadcasting services’ digital connections and transmitters to cover the cities of Sarajevo, Banja Luka, and Mostar with digital signals.
The digitization will include three public broadcasters, which will cost about $30 million after all phases of the project are complete.
The incumbent operators are required by law to conduct open public tendering procedures for the purchase of goods and services.
Procurement notices can be found on the companies’ websites listed below. The best way to access these opportunities is via some form of local presence, either direct or through agents and distributors.
Web Resources
BiH Communications Regulatory Agency (CRA)
BH Telecom
Hrvatske Telekomunikacije (HT) Mostar/HT Eronet
m:Tel