Overview

Information about the sector’s regulatory framework and latest activities can be found on 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 M:Tel (Telekom Srpske) covers the entire territory of Republika Srpska.

M:Tel 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.  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 2020, which revealed that mobile subscriber numbers decreased by 6 percent.  According to the regulator’s statistics, there were a total of 3.509 million mobile subscribers in the country at the end of 2020.  BH Telecom remains the sector leader, accounting for 43.4 percent of the nation’s mobile subscribers at end of 2020, followed by the other two network operators M:Tel and HT Eronet retaining their second-placed and third-placed spots with 36 percent and 20.3 percent, respectively.  At the end of 2021, there were six active mobile virtual network operators in Bosnia and Herzegovina. 

Total fixed line connections declined by 25 percent in 2021 to 543,797 with the nation’s three “dominant” operators – BH Telecom, M:Tel, and HT Mostar – controlling the majority (81 percent) of those between them while the number of fixed line connections with the private telecom companies increased to 145,498.  The number of Internet users in 2021 was 2.3 million users with Internet penetration at 71 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 traditional 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.  Despite the deadline for transition to digital broadcasting passing in 2015, the process of digitalization is still ongoing, which should provide 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.

Resources

• BiH Communications Regulatory Agency (CRA)
• BH Telecom
• Hrvatske Telekomunikacije (HT) Mostar/HT Eronet
• m:Tel Telekom Srpske