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BMI View: The mobile market has seen a number of significant developments in recent years that has increased competition and accelerated development of services in the country. Wireless data services are becoming more established, with operators extending investment outside their historical concession areas. Meanwhile , the introduction of mobile number portability will put downward pressure on prices and should result in an increase in total subscriptions. Meanwhile , in the wireline market there has been some consolidation, creating converged service players that should challenge the incumbents. There is also the prospect of the privatisation of some of the state holdings in the sector, with reported interest from major telecoms groups in the region. These developments are ushering in a brighter era for the market, which in 2013 still remains a laggard in the region in terms of service penetration for mobile and broadband, with relatively high prices and little progress on VAS.
BMI upgraded its estimate for mobile subscriptions at the end of 2012 on the basis of operator results from Telekom Srpske. We maintain our view that moderate subscription growth will continue over the medium term.
Data from the regulator, CRA, showed Bosnia's fixed-line market to be declining faster in 2011 than 2010, with the rate of decline accelerating to 4.5%.
However, CRA data for the fixed broadband market showed strong growth, with total fixed subscriptions increasing 39.2% to reach 430,247 at YE11.
Key Trends & Developments
There has been consolidation in the wireline market as smaller players are being reorganised to create businesses that will provide stronger competition to the regional incumbents. In December 2012 Mid Europa Partners merged Serbia Broadband with Telemach Group to create an entity with strong pay-TV presence, as well as high capacity broadband, fixed voice and mobile MVNO services. Consolidation continued as Telemach agreed...