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BMI View: Bosnia is one of the least developed markets in Central and Eastern Europe , which means there is great medium - term growth potential. Bosnia's mobile market recovered in Q213 and Q313, after a net subscription loss in Q113, confirm ing our view of continued subscription 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 that regular inactive SIM discounting poses a downside risk to our outlook. Meanwhile, the wireline market is gaining momentum as competition between the incumbent operators and alternative players drives innovation and lead s to lower prices. The take-up of mobile data services could however ultimately lower growth in fixed broadband subscriptions, particularly once LTE services become available.
The mobile market grew by 2.6% q-o-q in Q313, as penetration rose to 87.7%, indicating significant growth potential for operators over the medium term.
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 652,000 broadband subscriptions at end-2013, up 14.7% y-o-y.
Key Trends & Developments
The wireline market is evolving in Bosnia as a result of investments by the incumbent operators and the activities of alternative operators. There has been a spate of acquisition activity in the market, which is resulting in smaller operators making gains and posing an increasing challenge to incumbent operators. Telemach has been active, acquiring Art-Net in March 2013, while Telekom Slovenije owned BlicNet acquired No Limit Technology in December 2013. However, the incumbent operators have also been active, with m:tel reaching an agreement to acquire Logosoft in December 2013, following its proposed acquisition of Elnet . BMI believes consolidation of smaller...