Croatian incumbent in deadlock with regulator over fibre

Croatian incumbent T-Hrvatski Telekom has said that it is locked in a stalemate with the country’s regulator over fibre broadband, which is hindering the country’s economy. The operator added that it cannot see a resolution in the near future to the stand-off, which began two years ago.

President and CEO Ivica Mudrinić told that the company is now in a position where it can “very quickly” deploy fibre to the home (FTTH) to 300,000 Croatian households .

“However,” he said, “the regulator has used the copper based access pricing as a reference point to define the wholesale rate for fibre. This means that it would force us to offer our wholesale fibre product to our competitors at less than the cost, or we would be effectively subsidising our competitors, which of course, we refuse to do,” he said.

He added that the key hurdle is in bringing the down the cost of rolling out fibre, and believes for that reason, the dynamic has changed and the operator is now in a buyer’s market.

“The vendors have to find ways of reducing this cost significantly, and this is an opportunity for us. On one side, we may have missed a year or two because of the regulatory impact, but on the flip side, we actually have an opportunity to make this happen at a significantly lower cost.”

Dr Dino Dogan, the operator’s CFO, added that the current situation is causing problems to the economic health of the country.

“We’ve been talking about how important it is to attract foreign direct investment to Croatia, but we are creating a disadvantage by not using this infrastructure, which is essential in attracting investment,” he said.

T-Hrvatski Telekom has not stopped developing its fibre network, and is currently negotiating terms to compromise on both the retail fibre and wholesale fibre pricing to enable it to roll the service out. The firm is seeking to find a solution and is exploring the possibility of renegotiating terms by offering a higher speed service.

“With fibre you can go up to 1Gbit/s and beyond, so maybe we can start with higher speed and higher quality of service and set a higher price level for a better quality service,” added Mudrinić.

But he admitted that currently, there is no light at the end of tunnel, and an agreement with the operator still seems a long way off.

“We simply don’t know when this will be resolved and realistically, we’re the only one that’s in a position to roll out fibre, so I think it’s a little foolish for the regulator to do this.”

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