Time is right to connect to Bosnia
THE REGION'S STATE-OF-THE-ART TELECOMS SYSTEM IS IN THE PROCESS OF BEING REBUILT BY OPERATORS SUCH AS TELEKOM SRPSKA AND PTT, AND ALSO WITH THE ASSISTANCE OF OVERSEAS AID

ZELJKO JUNGIC General Director of Telekom Srpska

Before the war, the telecommunications system in the former Yugoslavia was a highly successful operation. “We were better than any Central-Eastern European country and the first in Yugoslavia to introduce optical fibers,” says Zeljko Jungic, general director of Telekom Srpska. The subsequently destroyed infrastructure was rebuilt with aid from the European Bank for Reconstruction and Development, the International Telecommunications Union, and funds from European countries such as Switzerland, Italy and Sweden.
Telekom Srpska separated its post and telecom sectors in 1996 and reentered the market in 1997 as a new company with a young educated staff. “We digitalized our network up to 100% in efficiency and 75% in switching,” says Mr. Jungic. Current penetration is 20% fixed network and 10% mobile GSM, and the future overall target is 30%. In May 2001 they obtained the GSM license for the whole of BiH and received a huge customer demand for contracts. Mr. Jungic expects 500,000 subscribers by 2002. “The connection fee and cost per line are very low in comparison to a contract in a fixed network,” he says.

PTT BIH: a better quality of communication for a better quality of life.

Liberalization has already started in GSM licenses and there is a need to speed up the privatization process as the price of the company depends on it. So far, revenue has increased by 50-70% and profit has been reinvested in further development. “Our business plan is to invest $45 million per year for five years. For the past three years we have invested $36-40 million annually,” affirms Mr. Jungic.
Finding a commercial loan is a problem as the government cannot issue any guarantees, and all investments have come from the company’s own over-stretched coffers. The costs of UMTS licenses have not left enough funds for other investments. “We need a strategic partner or an investor to help us grow faster,” says Mr. Jungic. “A strong partner could help us to develop in two to three years instead of five. We can double density in a fixed network and triple it in a mobile one. Investment in this area can be very profitable.”

AMIR SPAHIC General Manager of PTT BIH

The Federation’s state-owned PTT also made an impressive recovery from the wartime ravages. “We rebuilt the company on our own,” says recently appointed general manager, Amir Spahic. “Our technical infrastructure was completely devastated but we managed to establish the best telecom system in the state.” Today they provide telecommunication and postal services to seven regional directorates.
Mr. Spahic’s plan is to synchronize PTT’s development to world standards, beginning with the separation of telecommunications and postal services at the end of the year. “We aim to extend our GSM network to cover the whole territory of BiH, reach European subscribers, educate our users and offer services which will keep them satisfied,” he says. He admits it is costly to try and connect all corners of Bosnia’s mountainous terrain but PTT cannot concentrate solely on mobile phones as terminal equipment is not developed for the mobile network. He does not intend to raise telecom rates and says the mobile ‘ultra’ card is temporarily expensive because it includes many elements. “The demand is still high regardless of the price,” he adds, and hopes to be ready to lower prices soon.

Requests by international organizations have evoked great public interest in PTT . “This market could have a million subscribers,” says Mr. Spahic. He aims to enrol at least 5,000 new internet users before leaving office and invest DEM 1 billion by 2005. “Every year we expand our market for 60,000 mobile and 80,000 fixed phone subscribers,” he claims.
Mr. Spahic mainly looks towards Europe, but would welcome consultative and technological help from the U.S. “We can offer communication in a geographical sense and via our telecommunications network. We will do business with companies that seriously consider establishing themselves permanently in Bosnia and Herzegovina,” he says.