February 8, 2018 / 9:59 AM / a year ago

Croatia's top telecoms firm calls for steps to help switch to digital

ZAGREB, Feb 8 (Reuters) - Croatia should capitalise on its growing economy to bolster its digital infrastructure by lowering telecoms licensing fees and by taking other steps, Hrvatski Telekom (HT) said on Thursday.

The company, Croatia’s biggest telecoms firm that is 51-percent owned by Deutsche Telekom (DT), also said it was looking at possible acquisitions in the Balkan region although it still saw potential to grow in its home market.

“I believe that a reform in digital transformation could be one of the important leaps,” said Chief Executive Officer Davor Tomaskovic told Reuters in an interview.

He said the government should reduce radio frequency licensing fees that he said were still among the highest in Europe, although he did not give figures.

Tomaskovic also said fees for using public space when building infrastructure were too high.

“Many countries in Europe even offer it for free to boost digital development, while in Croatia the costs reach 10 percent of the value of its fixed line market,” he said.

He said a flat tax on income instead of the existing progressive rate would boost net wages and reduce the number of skilled workers leaving Croatia that hurt telecoms firms.

Croatia’s economy is estimated to have expanded 3 percent last year, but analysts say growth will not exceed 2 percent in the longer term without steps to cut red tape, reduce taxes and create a more efficient public sector and judiciary.

HT said it aimed to continue with annual capital investments of at least 1.6 billion kuna ($263.13 million).

“We’re content with our 2017 results and our goal this year is to grow further. We believe there is a space for further market growth in Croatia, but we are also keeping an eye on any potential acquisition in the (Balkan) region,” Tomaskovic said.

HT, which controls some 60 percent of the local telecom market, will release 2017 results on Feb. 21. It has said it expected revenues of around 7.65 billion kuna.

$1 = 6.0806 kuna Reporting by Igor Ilic; Editing by Edmund Blair

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