All three major telecoms in Croatia - HT, A1 and Telemach - expect "positive business trends" to continue in 2023, thanks to Croatia's membership in the euro zone and the Schengen Area, as well as further investment in network infrastructure and the radio-frequency spectrum.

Speaking to state news platform Hina, the CEOs of all three companies said their business “called for continuing the digital and green transitions, creating a better legislative and investment framework, and further relieving enterprises of parafiscal levies,” Hina said on Wednesday.

They said that in 2022, despite a challenging macroeconomic environment, inflationary pressures and energy prices, they generated good business results and continued to invest in optical and 5G networks as well as “improvements to user experience.”

CEO of Deutsche Telekom-owned HT, Kostas Nebis, said that 2023 “would be difficult because of inflation and muted economic growth,” but that Croatia joining the euro zone and the border-free Schengen Area, and a historically high investment rating, gave a positive start to the year.

“He underlined the importance of digitalization, stimulating investment, reducing parafiscal levies,  and modernising regulations, including the regulation of fixed broadband internet prices. He also mentioned the risk of a recession,” Hina said. By the end of the year, Nebis added, HT will enable gigabyte speeds for an additional 150,000 clients.

CEO of Austrian-owned A1, Jiri Dvorjancansky, said “a galloping inflation and a likely recession would make this year more challenging,” and that he expected pro-investment measures from the government. Croatia’s membership in the euro zone and the Schengen Area will “support the economy and development, as well as bring more tourists which,” he said, which translates into more revenue and additional investment for telecoms.

Dvorjancansky said A1 was using its own as well as EU funds to continue to build the largest optical network in Croatia, so that two in three households could have access to it. By mid-2023, A1 plans to have 90 percent of Croatia covered with 5G network. The company also invests in eco-friendly technology, he said.

CEO of Telemach, Adrian Jezina, said this telecom was “optimizing its infrastructure and services,” and that it planned to invest €267 million in a fast gigabyte optical and mobile 5G network by 2025. He said Croatia’s membership in the euro zone and the Schengen Area would have a positive effect on the whole market, helping the stability and control of interest rates, and increasing the tourist turnover.

Also on the agenda this year is the completion of a public auction for radio frequencies used by telecoms whose licenses are set to expire in 2024.

The state regulator Hakom expects to earn some €150 million from the auction. The bidding begins on 16 January, while a decision on the new licenses is expected in March. The licenses will be given for a period of 15 years, and can be extended for another five.