Bosnia-Herzegovina made remarkable economic progress since emerging from war in the 1990s to the financial turmoil of 2009. Since then the country’s economy has slowly recovered, though GDP is expected to reach only 0.5% in 2013 following negative growth in 2012. Future economic prosperity relies to a great extent on the country’s integration with the European Union. In preparation for eventual membership, the country has sought closer integration with the EU and adopted a range of commitments to political, economic, trade, and human rights reform. It has also aligned its telecom policies and regulatory measures to prepare it to compete effectively within the EU.
The market has been liberalised and a regulatory framework created based on the EU’s regulatory framework for communications, promoting competition as the most efficient way to offer communications products and services. Ongoing introduction of secondary legislation by the regulator is slowly improving the regulatory environment. To this end, the regulator has promoted fixed-line and mobile number portability, reduced interconnection tariffs and allowed the three incumbent operators to provide services outside their original concession areas.
The telecom market is characterised by three zones, each with an incumbent telco. The largest operator BH Telecom dominates in the FBiH, while Telekom Srpske operates in Republika Srpska and HT Mostar is active in Herzegovina.
The fixed-line broadband network is comparatively underdeveloped, with the result that investments made in 3G mobile upgrades by BH Mobile and Telekom Srpske will facilitate broadband connectivity in the country to a greater extent than is common elsewhere in Europe.
Although a number of fixed-line operators offer services the market is dominated by the three incumbent operators, which hold a combined market share of 99%. All three incumbents are subject to specific obligations designed to improve competition.
Internet services are available through the incumbents and alternative operators. Internet usage in Bosnia-Herzegovina is showing signs of significant growth on the back of competition and the improved availability of services.
The three mobile network operators (MNOs), each affiliated with one of the incumbent fixed-line operators, provide near-national coverage. Their networks, being upgraded to support services based on HSPA technology; will in coming years support broadband in rural areas where fixed-line infrastructure is insufficient. In addition, mobile data and mobile broadband offers will provide future revenue growth given the limited potential of mobile voice services.
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