Due to Regulations, Croatia Lagging in Broadband Infrastructure Development

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Telecommunication companies hope for more favourable regulatory framework.

Croatian legal framework is not favourable for investments in telecom infrastructure for fixed broadband internet, which is the reason why Croatia is among the last in Europe in terms of broadband development, warned CEO of Telekom Austria Alejandro Plater and CEO of Vipnet Jiri Dvorjanchansky at a meeting with journalists, reports Jutarnji List on March 15, 2017.

Plater visited Vipnet, which is a member of Telekom Austria Group, to mark the Vipnet’s acquisition of Metronet. He also commented on business and investment opportunities in Croatia, which are, in his opinion, adverse to telecoms because fixed telephony market has not been sufficiently liberalized, which slows down investments in advanced infrastructure. “Market liberalization in the fixed segment in Croatia is headed in the wrong direction, considering there is an operator which controls more than 80 percent of the fixed market, with the possibility of further increase in the share. Such situation exists only in Bulgaria, while in almost all other EU countries the share is between 40 and 60 percent”, said Plater.

Dvorjanchansky said that such environment puts Vipnet in a quite challenging situation, and one of the biggest reasons for that is the fact that in Croatia there are as many as 18 laws and regulations which directly and indirectly affect the development of broadband infrastructure, which slows down market development. “We hope that the government will simplify legislation and reduce paperwork, which would mean a lot for telecoms, because we could be more effective and citizens could be offered better prices and services in the fixed segment”, said Dvorjanchansky.

They both quoted a number of data points, from the State of the Internet research conducted in 2015, which showed that Croatia had the slowest and most expensive internet in the European Union and the third worst result in Europe after Albania and Montenegro, to a EU’s warning in October last year that it should lower the price of broadband internet development.

The latest Digital Economy and Society Index DESI 2017 confirmed that Croatia was among the worst EU countries by high-speed internet coverage, and that Croatian citizens spend 2.5 percent of their monthly income on telecommunications services, while in the EU the average is 1.3 percent.

Dvorjanchansky pointed out that last year Vipnet had an increase in revenues by 8.6 percent to 398.3 million euros, as well as 12.3 percent growth in EBITDA to 88.3 million euros, which made Vipnet, in his opinion, the most successful telecom company in Croatian market.


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