Croatia has prospered due to its close relationship with the European Union although its ambition of EU ascension has taken longer than anticipated. Close economic ties with both EU and non-EU nations are evident; principal export partners are Germany, Bosnia-Herzegovina and Italy, while its main import sources are Italy, Germany and Russia. The global financial crisis affected Croatia due to reduced capital inflows and a drop in export demand. This was coupled with a large current account deficit, a high level of external debt, as well as significant exposures to interest and exchange rate risks. The collapse in market confidence coincided with real GDP contraction of 5.8% during 2009. The EU forecasts a further 0.5% contraction during 2010 before expanding again in 2011 by 2%.
The overall telecoms industry has weathered the economic turmoil relatively well due to the essential nature of most telecom services although it has been impacted by initiatives such the imposition of a tax to improve the state budget and decreased demand for services. Following market liberalisation alternative operators have made inroads into the fixed telephony market, with the incumbent’s market share slipping below 80% of total subscribers and revenue. To ensure fair competition, the regulator has introduced a number of regulatory measures including reducing the incumbent’s rates for call termination as well as improving access to the incumbent’s last mile network.
Broadband services are widely available and DSL is the dominant form of broadband access, with competing services available via cable, Fibre-to-the-Home, and wireless broadband. Recognising the potential of applying ICT to improve both social and economic development, Croatia has taken steps to develop a knowledge-based society, encompassing education, health and government services. A healthy digital TV market is evident, with content accessible via cable TV, satellite and broadband TV. Bundled offerings such as triple play have been launched by the cable operators and the telecoms incumbent.
News source: Balkans.com link: article
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