After a slow start to 2013, Bosnia's mobile market recovered in Q213, albeit with a marginal growth, to confirm our view of continued subscriptions growth on the back of regulatory measures aimed at boosting competition. We therefore retain our five-year growth forecast for the mobile sector, but caution regular inactive SIM discounting poses a downside risk to our outlook. The fixed-line market is benefiting from intense competition between the incumbent operators and alternative players. This is driving down prices and sustaining growth, especially in the broadband sector, despite increasing take-up of mobile voice and data services. As subscription growth slows across all services as a result of market saturation, we expect operators to ramp up high-value offerings such as multiplay services to boost value growth.
- The mobile market grew by 0.4% q-o-q in Q213 to partially offset a decline of 2.8% in the previous quarter.
- Data from the regulator, CRA, showed Bosnia's fixed-line market to have declined faster in 2012 compared to 2011, with the rate of decline accelerating to 9.8% from 4.5% in 2011.
- We estimate a total of 601,000 broadband subscriptions at end-2012, up 14.7% y-o-y.
Key Trends & Developments
BH Telecom is planning to make acquisitions in the domestic market, according to the company's director Nedzad Residbegovic. BH Telecom is planning to acquire smaller players in the market partly to secure new revenue sources as well as to consolidate its position as the leading operator in the country amid reports that Hrvatski Telekom intends to buy Telekom Slovenije.
There is growing interest in the LTE technology among Bosnia's leading mobile operators. We believe this is related to the strong uptake of 3G services and the need to extend data services to areas not yet covered by fixed network infrastructure. Telekom Srpske and BH Telecom are leading the race to roll out 4G services. The former announced that it successfully tested its 4G technology initiative in live conditions in May 2013 using equipment supplied by Chinese vendor ZTE. For its part, BH Telecom and Ericsson Nikola Tesla signed an agreement to launch an LTE pilot in August. During the test period, all users within the test zone will be able to access the network with a wide range of data-enabled devices, including smartphones and tablets. The date for the commercial launch of the network would depend on the completion of the installation of base stations as well as the successful completion of the trial.