Research on Improving Bosnia and Herzegovina Telecommunications Industry
EssayChat / Jun 15, 2020
Over the past few years, the European telecom industry sector has been laden with several significant challenges. One of the biggest challenges in the European telecom sector has been the emergence of new fast-paced technological changes coming in succession. These technological changes often come along with new competition forms and new business models based on technological changes. This situation has proven very challenging for the European telecom markets and sector as a whole. Regulation is the biggest and the most important driver of the telecoms sector. This report seeks to take on the global regulatory temperature with a keen eye on the countries within the European Union where regulation does not support investment in the telecoms and where regulations support the telecoms investment. In this report, the harshest regulation in the telecoms market has been faced by the European Telecoms Countries, a case in point, Bosnia and Herzegovina, and recommends the easing of the unfavorable regulations for the telecoms industry to spur growth in the industries.
Bosnia and Herzegovina's economic prosperity largely depends on the continued integration of the country into the European Union. The integration has been working in favor of Bosnia and Herzegovina because their GDP growth has been registering recoveries from the slowdown caused by the global financial recession that occurred in 2009. Bosnia and Herzegovina have been registering a slow, but steady growth with an annual constant averaging above 3% between 2015 and 2018.
The telecommunications market for Bosnia and Herzegovina has been liberalized since it joined the European Union. The regulatory framework of Bosnia and Herzegovina is based on the regulatory framework of the European Union for communications. In the Bosnian telecommunications market, the market has three zones where BH Telecom is dominant; HT Mostar actively operates in Herzegovina, and Srpske is operating in Republika Srpska. These three operators are controlling 99% of Bosnia and Herzegovina telecommunications market as they are subject to specific duties, which are designed for the improvement of competitiveness of the market share (Lancaster, 2020 n.p).
In Bosnia, the fixed-line broadband network not optimally developed. The investments in the upgrades by Telekom Srpske and BH Mobile are providing broadband connectivity in the country to a bigger degree than is the practice in other parts of Europe. The availability of the internet is made possible by incumbents and several alternate operators. Cable and DSL are the major platforms for providing fixed-line connectivity, while there is only a small market presence for broadband internet. The fact that Bosnia and Herzegovina largely depend on the European Union implies that it echoes the challenges experienced in the region. This means that Bosnia and Herzegovina's production chains are operating from a weak point, and the outbreak of Coronavirus in 2020 has a big impact on the production and the global supply chains. In the coming years, to various degrees, Bosnia, coupled with the challenges in the European Union regulatory framework, will likely experience mobile device and internet upgrading downturn. This means that the network operators are going to find it difficult to manage workflow while at the same time maintaining and upgrading the infrastructure that they already have.
Even though the regulations in the European Union telecoms industry have been improving over the past five years, the troubles of the telecoms companies in Europe have their foundations in some unsupportive regulations. One time, Europe was a leader in the technologies comprising of the digital economy's backbone. These glory days for the European telecoms are long gone with the great market performances shifting to several markets in North America and Asia. In the North American markets and the Asian markets, the subscribers enjoy access to fiber penetration, which is up to approximately 20 higher times than the European customers do, at the same time enjoying LTE penetration that amounts for up to 35 times higher than the European customers do. European consumers have, as a result, been relegated to experiencing incessant slower connections, which translate to slower economic growth and lesser value. The foundation of the modern digital economy is fast connectivity, which is also a key enabler of greater innovation in countries. With the situation in the European marketplace, Europe is slowly falling behind the world stage of development.
The decline in Europe's connectivity is dire because of the adverse consequences it exposes the region. The slow penetration in the European Telecoms markets implies that the GDP growth of Europe is slated to suffer a great setback. According to a report by the Boston Consulting Group (2017, p. 7), "up to €750 billion in GDP growth and as many as 5.5 million jobs in the European economy, are at risk by 2020, because of the lack of next-generation network investments." In the last seven years, there has been a drop of about 4% in the European telecommunications infrastructure, while other international markets grew by the same margins over the same period. There have been no major changes that are requisite for a turnaround in the period leading to this moment. The lack of these changes explains the reasons for the European telecommunications sector's continued contraction over the past years. If the status quo remains, there is likely to be a greater decline in the coming years. While writing this report in 2017, the Boston Consulting Group Estimated that continued lack of investment in the telecommunications penetration would mean that by 2020, European telecommunications industry would require capital injection amounting to an aggregate of between €110 billion and €170 billion to satisfactorily meet the European Union Digital Agenda objectives for coverage and penetration of broadband for the broader European Union. This magnitude of investment would translate to lost opportunities for the European Union and would equate to an enormous missed opportunity for the greater European Union Economy, amounting to as much as 5.5 million job opportunities or a GDP growth of €750 billion.
The root cause of the problem of the European telecoms market that has been running in the past decade to this moment is related to the distorted regulatory space. Specifically, the problem relates to the regulatory distortion of competition in three main areas. The regulators hinder the network owners from getting fair returns that they need to plough back into their businesses to fund investments. This situation is primarily because of inconsistencies in regulations and over regulations of the competitive markets. This primary challenge is because of the lack of local assessment of the relevant competing infrastructures. Another closely related problem is the preferential treatment that is given to the non-infrastructure players by the lopsided laws. These current approaches command greater inefficiencies in the mobile sector, including the mobile spectrum allocation and the barriers to the consolidation in the European telecoms industry that is highly fragmented.
Another big challenge in the sector is the lack of a true digital single market for the European telecoms market with the harmonization of regulations. This gap in the regulatory space implies that across the member states of the European telecoms market, the operators are hindered by the member states from attaining the ability to reap the synergies that come across different countries in the larger European telecoms market (Boston Consulting Group, 2017 p.8).
These challenges mean that the European telecoms market is experiencing a market failure. The situation means that the European telecoms market needs a change for the better because it is one of the sectors that have the worst performance against the expectations of the investors. Up until 2018, for example, the "FTSE Eurofirst 300 Telecoms index has fallen 18.6 percent, compared with a 9.3 percent fall for the broader FTSE Eurofirst 300 index"(Fides, 2018 n.p). This sharp drop implies that the European Telecoms have literally been running out of the requisite fiscal steam, and the shareholders are not willing to hold on anymore to the failing industry. The European telecoms market has proliferating price competition and extreme regulation. Most of the companies in the telecoms sector in Europe are therefore incapable of covering the costs of capital from the profits they generate from their operations.
With the historical and the current challenges faced by the European telecommunications sector, it is increasingly becoming very difficult for strategists to understand the numerous varied forces that are affecting the European telecoms industry in this case, Bosnia and Herzegovina. This implies that it might be very challenging to come up with viable predictions of the structure, and the returns that might come from Bosnia and Herzegovina's telecommunications market in the period spanning five years from the year 2020. In turn, it is becoming very challenging to determine the way which operators ought to seek to invest and compete in the future.
However, despite these challenges, this report seeks to identify the important key forces of change in Bosnia and Herzegovina and suggest a useful approach to categorizing them within a logical and simple framework. The report also seeks to assist the readers in refining their thoughts on the way Bosnia and Herzegovina's might develop by stating certain futures that are independent of each other such that they can be realistically internally correct and meaningful. Lastly, this report seeks to move a prediction for the future of Bosnia and Herzegovina's telecommunications market.
Bosnia and Herzegovina face different scenarios for the future of the telecommunications industry for the year 2020 going forward. There is a "back to the future" option, and this scenario is likely to be the realization of a very attractive telecommunications market, where the leading operators focus skills and ambitions for enhanced infrastructure. This scenario might yield a consolidated utility, which might be the outcome of an unattractive market. The country might experience a digital renaissance, which will mean the advent of new digital ambitions, which would birth new skills that would grant the operators a new and attractive market. Lastly, another scenario that Bosnia and Herzegovina would face would be a disastrous market situation, which would stem from the resultant lofty digital ambitions that they would be pursuing in the face of a telco market that is unattractive (Fry, 2020 n.p).
Bosnia and Herzegovina's health depends on the health and the structure of all the European industries, especially to a greater degree in the macro-economy of Europe. The happenings in Europe, such as the Brexit, could, for example, cause material outcomes on the growth in entire Europe over the next half-decade. The assumption here is that Europe is experiencing a stable phase of slow growth and that the resultant economic situations of the other European markets experience a steady improvement. In the event of the European economic status deterioration, the new macroeconomic status across the region will affect Bosnia and Herzegovina's opportunities, which are likely to diminish stemming from the dependence of the country on the European Union dynamics.
To break the weaknesses and make a turnaround, it is important to turn around these trends if Bosnia and Herzegovina and entire Europe need to remain competitive in the international digital marketplace to meet the objectives of the European Union digital agenda. In order to meet these objectives, it is important to institute a shift in the approach in the regulatory space.
One of the feasible strategies is focusing on the telecommunications sector-specific regulation enactment at the state member level and progressing into a fully considerably reduced and fully synchronized European regulatory approach regulatory measures that are most reliant in the established laws that foster fair competition. It is necessary to conduct the assessment of the impact of the industry moves like mergers based on the short term effect on the prices to a holistic short term and long term view of all the consequences for the consumers, including the benefits that new investments would accrue.
Bosnia and Herzegovina ought to shift focus from a perception of the market that is based on rigid and narrow networks definitions, technologies, services, and national borders ought to focus on a paradigm, which takes account a complete view of the value chain in a technologically agonistic fashion, with a geographic approach that is differentiated (the approach can take the form of pan-European, national or local) based on the differentiated services offered across the different markets.
There is a need to rethink the logic that underlies the prevailing approach to the telecoms regulations managing Europe. The regulations ought to take note that the consumer ought to remain the center and the front in all the regulatory strategies adopted. This central placement of the interests of the consumers when rafting regulations requires that the consumers access affordable infrastructure. The infrastructure that is in use currently, must, therefore, enable services that are affordable to the consumers as the consumers also benefit from robust digital services and telecommunications ecosystem that is populated by strong and vibrant companies that are in competition to win the consumers. These endeavors to win the consumers in part should focus on investments in cutting edge technologies and new services. It is essential to institute the vibrant protection of consumers. Still, the regulatory emphasis of Europe needs to focus on creating efficiency, realizing modernization, and fostering healthy competition (Fry, 2020 n.p).
To accomplish this challenge, there is a need to have a multipronged paradigm shift in the regulatory space. The regulatory space needs to focus on the sector-specific regulation, which is enacted at the member state level; in this case, the level of Bosnia and Herzegovina to a fully synchronized and substantially reduce regulatory approach in the pan-European regulatory approach, which mostly relies on grounded competition law. Aside from this action, there is need for primal assessment of the industry moves impacts like mergers based on the short term effects on prices to both the short and long term holistic views of all the effects for consumers, including the benefits that might come by as a result of more investment portfolios.
Looking from the viewpoint of the market, which is based on rigid and narrow definitions of services, technologies, networks and national boundaries to a paradigm, which takes to account a full view of the value chain, such a shift taken at the policy level can quite quickly lead to practical changes that refresh the investments in Bosnia and Herzegovina telecoms infrastructure networks and lead to the easy reach of the digital agenda. Policymakers in Bosnia and Herzegovina need to focus more on creating incentives for private investments in telecommunications. This approach implies an increased focus on investments as a strategic emphasis. For example, Bosnia and Herzegovina can inject a few billion as part of additional infrastructure investments in order to boost the growth of the national telecommunications industry to boost growth in the industry.
If the telecommunications sector is to become competitive, there must be a turnaround on the prevailing trends to ensure Bosnia and Herzegovina, and on a larger scale, Europe remains competitive in the global telecommunications and digital marketplace. The first step towards a turnaround is to tackle the regulatory root cause of the telecommunications investments that are declining and investing in the unlocking of the potential value of the common digital market. The objective is to allow for a more efficient and fairer competition, as well as achieve increased expected cash flows, which are available for the investments of the next-generation networks.
While looking at revising the local laws in Bosnia and Herzegovina to enhance the internal synergies of the next generation internet opportunities, one of the extensive and far-reaching steps is the harmonization of the procedures and rules that are required to enable the telecommunications companies operating in multiple European Union to enjoy the full potential of cross country collaborations as well as help to decrease the hurdles for organizations seeking to give European pan services. The harmonization extent needed to pave the way for the introduction of cross-border platforms for network management and information technology is far-reaching and moves beyond the specific regulation at the national level. The harmonized procedures and rules for the protection of consumers across the European Union and the technical processes would make it possible for telecom operators with cross-European operations to realize the additional synergies through the standardization of the information technology processes across different countries and ensuring the implementation of the cross-border information technology platforms (Rossi, 2014 p.20).
Bosnia and Herzegovina operate within the ecosystem of European telecommunications, which is very complex. The infrastructure comprises of several stakeholders that have competing interests. The position of everyone is supposed to be considered. However, there is an urgent need to move forward with the task of ensuring the streamlining, harmonization, and modernization regulations. The longer it takes, the investment hindering distortions constantly remain in place, the further that Europe will fall behind the leading international markets in the digital services or and infrastructure. As these challenges continue, the biggest losers are the economy of Bosnia and Herzegovina and the European Union, the businesses, and the consumers.
Bosnia and Herzegovina operate under the legal framework developed by the European Union. It, therefore, suffers the same challenges of the European Union, especially the unfavorable regulations that are not suitable for growth. To advance, Bosnia and Herzegovina need to enact its own regulations aside from the main regulations of the European Union to enable it to have speedy internet especially move faster than the rest of Europe by making legislations that deter dominance by big players and allowing competitiveness which will spur growth, competition and lower costs for the consumers. The laws must be centered on having the consumers enjoy affordable and fast internet. With the advent of the 5G connectivity, it can move with speed to realize these changes that will enable a higher uptake of the telecommunications products on an increased scale leading to greater opportunities for employment and faster growth of the country. These steps must focus on achieving diversification. Data is an important commodity, and only radical transformation of the business model aided by suitable rules to accommodate a great portfolio of services in the enterprise and digital connectivity domain will generate revenues and expand opportunities through a focus on long term value creation for consumers.
References
Boston Consulting Group. (2017). Reforming Europe's Telecoms Regulation to Enable the Digital Single Market. Home - European Telecommunications Network Operators' Association.
Fildes, N. (2018, October 30). Telecom italia chief bemoans 'market failure' of sector in Europe. Financial Times.
Fry, W. (2020, February 13). New European electronic communications code reforms regulation for telecoms industry. Lexology.
Lancaster, H. (2020). Bosnia-Herzegovina - Telecoms, mobile and broadband - Statistics and analyses - BuddeComm. BuddeComm-Telecoms research on over 200 countries. Find any data.
Rossi, L. (2014). Proposal for the reform of the regulation of digital services.
Bosnia and Herzegovina
Bosnia and Herzegovina's economic prosperity largely depends on the continued integration of the country into the European Union. The integration has been working in favor of Bosnia and Herzegovina because their GDP growth has been registering recoveries from the slowdown caused by the global financial recession that occurred in 2009. Bosnia and Herzegovina have been registering a slow, but steady growth with an annual constant averaging above 3% between 2015 and 2018.
The telecommunications market for Bosnia and Herzegovina has been liberalized since it joined the European Union. The regulatory framework of Bosnia and Herzegovina is based on the regulatory framework of the European Union for communications. In the Bosnian telecommunications market, the market has three zones where BH Telecom is dominant; HT Mostar actively operates in Herzegovina, and Srpske is operating in Republika Srpska. These three operators are controlling 99% of Bosnia and Herzegovina telecommunications market as they are subject to specific duties, which are designed for the improvement of competitiveness of the market share (Lancaster, 2020 n.p).In Bosnia, the fixed-line broadband network not optimally developed. The investments in the upgrades by Telekom Srpske and BH Mobile are providing broadband connectivity in the country to a bigger degree than is the practice in other parts of Europe. The availability of the internet is made possible by incumbents and several alternate operators. Cable and DSL are the major platforms for providing fixed-line connectivity, while there is only a small market presence for broadband internet. The fact that Bosnia and Herzegovina largely depend on the European Union implies that it echoes the challenges experienced in the region. This means that Bosnia and Herzegovina's production chains are operating from a weak point, and the outbreak of Coronavirus in 2020 has a big impact on the production and the global supply chains. In the coming years, to various degrees, Bosnia, coupled with the challenges in the European Union regulatory framework, will likely experience mobile device and internet upgrading downturn. This means that the network operators are going to find it difficult to manage workflow while at the same time maintaining and upgrading the infrastructure that they already have.
The Decline of European Telecoms
Even though the regulations in the European Union telecoms industry have been improving over the past five years, the troubles of the telecoms companies in Europe have their foundations in some unsupportive regulations. One time, Europe was a leader in the technologies comprising of the digital economy's backbone. These glory days for the European telecoms are long gone with the great market performances shifting to several markets in North America and Asia. In the North American markets and the Asian markets, the subscribers enjoy access to fiber penetration, which is up to approximately 20 higher times than the European customers do, at the same time enjoying LTE penetration that amounts for up to 35 times higher than the European customers do. European consumers have, as a result, been relegated to experiencing incessant slower connections, which translate to slower economic growth and lesser value. The foundation of the modern digital economy is fast connectivity, which is also a key enabler of greater innovation in countries. With the situation in the European marketplace, Europe is slowly falling behind the world stage of development.
The decline in Europe's connectivity is dire because of the adverse consequences it exposes the region. The slow penetration in the European Telecoms markets implies that the GDP growth of Europe is slated to suffer a great setback. According to a report by the Boston Consulting Group (2017, p. 7), "up to €750 billion in GDP growth and as many as 5.5 million jobs in the European economy, are at risk by 2020, because of the lack of next-generation network investments." In the last seven years, there has been a drop of about 4% in the European telecommunications infrastructure, while other international markets grew by the same margins over the same period. There have been no major changes that are requisite for a turnaround in the period leading to this moment. The lack of these changes explains the reasons for the European telecommunications sector's continued contraction over the past years. If the status quo remains, there is likely to be a greater decline in the coming years. While writing this report in 2017, the Boston Consulting Group Estimated that continued lack of investment in the telecommunications penetration would mean that by 2020, European telecommunications industry would require capital injection amounting to an aggregate of between €110 billion and €170 billion to satisfactorily meet the European Union Digital Agenda objectives for coverage and penetration of broadband for the broader European Union. This magnitude of investment would translate to lost opportunities for the European Union and would equate to an enormous missed opportunity for the greater European Union Economy, amounting to as much as 5.5 million job opportunities or a GDP growth of €750 billion.
European Regulatory Mishaps
The root cause of the problem of the European telecoms market that has been running in the past decade to this moment is related to the distorted regulatory space. Specifically, the problem relates to the regulatory distortion of competition in three main areas. The regulators hinder the network owners from getting fair returns that they need to plough back into their businesses to fund investments. This situation is primarily because of inconsistencies in regulations and over regulations of the competitive markets. This primary challenge is because of the lack of local assessment of the relevant competing infrastructures. Another closely related problem is the preferential treatment that is given to the non-infrastructure players by the lopsided laws. These current approaches command greater inefficiencies in the mobile sector, including the mobile spectrum allocation and the barriers to the consolidation in the European telecoms industry that is highly fragmented.
Another big challenge in the sector is the lack of a true digital single market for the European telecoms market with the harmonization of regulations. This gap in the regulatory space implies that across the member states of the European telecoms market, the operators are hindered by the member states from attaining the ability to reap the synergies that come across different countries in the larger European telecoms market (Boston Consulting Group, 2017 p.8).
These challenges mean that the European telecoms market is experiencing a market failure. The situation means that the European telecoms market needs a change for the better because it is one of the sectors that have the worst performance against the expectations of the investors. Up until 2018, for example, the "FTSE Eurofirst 300 Telecoms index has fallen 18.6 percent, compared with a 9.3 percent fall for the broader FTSE Eurofirst 300 index"(Fides, 2018 n.p). This sharp drop implies that the European Telecoms have literally been running out of the requisite fiscal steam, and the shareholders are not willing to hold on anymore to the failing industry. The European telecoms market has proliferating price competition and extreme regulation. Most of the companies in the telecoms sector in Europe are therefore incapable of covering the costs of capital from the profits they generate from their operations.
The dilemma about the Future
With the historical and the current challenges faced by the European telecommunications sector, it is increasingly becoming very difficult for strategists to understand the numerous varied forces that are affecting the European telecoms industry in this case, Bosnia and Herzegovina. This implies that it might be very challenging to come up with viable predictions of the structure, and the returns that might come from Bosnia and Herzegovina's telecommunications market in the period spanning five years from the year 2020. In turn, it is becoming very challenging to determine the way which operators ought to seek to invest and compete in the future.
However, despite these challenges, this report seeks to identify the important key forces of change in Bosnia and Herzegovina and suggest a useful approach to categorizing them within a logical and simple framework. The report also seeks to assist the readers in refining their thoughts on the way Bosnia and Herzegovina's might develop by stating certain futures that are independent of each other such that they can be realistically internally correct and meaningful. Lastly, this report seeks to move a prediction for the future of Bosnia and Herzegovina's telecommunications market.
Key Forces of Change in Bosnia and Herzegovina
Bosnia and Herzegovina face different scenarios for the future of the telecommunications industry for the year 2020 going forward. There is a "back to the future" option, and this scenario is likely to be the realization of a very attractive telecommunications market, where the leading operators focus skills and ambitions for enhanced infrastructure. This scenario might yield a consolidated utility, which might be the outcome of an unattractive market. The country might experience a digital renaissance, which will mean the advent of new digital ambitions, which would birth new skills that would grant the operators a new and attractive market. Lastly, another scenario that Bosnia and Herzegovina would face would be a disastrous market situation, which would stem from the resultant lofty digital ambitions that they would be pursuing in the face of a telco market that is unattractive (Fry, 2020 n.p).
Bosnia and Herzegovina's health depends on the health and the structure of all the European industries, especially to a greater degree in the macro-economy of Europe. The happenings in Europe, such as the Brexit, could, for example, cause material outcomes on the growth in entire Europe over the next half-decade. The assumption here is that Europe is experiencing a stable phase of slow growth and that the resultant economic situations of the other European markets experience a steady improvement. In the event of the European economic status deterioration, the new macroeconomic status across the region will affect Bosnia and Herzegovina's opportunities, which are likely to diminish stemming from the dependence of the country on the European Union dynamics.
Turning Around the Trends
To break the weaknesses and make a turnaround, it is important to turn around these trends if Bosnia and Herzegovina and entire Europe need to remain competitive in the international digital marketplace to meet the objectives of the European Union digital agenda. In order to meet these objectives, it is important to institute a shift in the approach in the regulatory space.
One of the feasible strategies is focusing on the telecommunications sector-specific regulation enactment at the state member level and progressing into a fully considerably reduced and fully synchronized European regulatory approach regulatory measures that are most reliant in the established laws that foster fair competition. It is necessary to conduct the assessment of the impact of the industry moves like mergers based on the short term effect on the prices to a holistic short term and long term view of all the consequences for the consumers, including the benefits that new investments would accrue.
Bosnia and Herzegovina ought to shift focus from a perception of the market that is based on rigid and narrow networks definitions, technologies, services, and national borders ought to focus on a paradigm, which takes account a complete view of the value chain in a technologically agonistic fashion, with a geographic approach that is differentiated (the approach can take the form of pan-European, national or local) based on the differentiated services offered across the different markets.
Ignition of Growth
There is a need to rethink the logic that underlies the prevailing approach to the telecoms regulations managing Europe. The regulations ought to take note that the consumer ought to remain the center and the front in all the regulatory strategies adopted. This central placement of the interests of the consumers when rafting regulations requires that the consumers access affordable infrastructure. The infrastructure that is in use currently, must, therefore, enable services that are affordable to the consumers as the consumers also benefit from robust digital services and telecommunications ecosystem that is populated by strong and vibrant companies that are in competition to win the consumers. These endeavors to win the consumers in part should focus on investments in cutting edge technologies and new services. It is essential to institute the vibrant protection of consumers. Still, the regulatory emphasis of Europe needs to focus on creating efficiency, realizing modernization, and fostering healthy competition (Fry, 2020 n.p).
To accomplish this challenge, there is a need to have a multipronged paradigm shift in the regulatory space. The regulatory space needs to focus on the sector-specific regulation, which is enacted at the member state level; in this case, the level of Bosnia and Herzegovina to a fully synchronized and substantially reduce regulatory approach in the pan-European regulatory approach, which mostly relies on grounded competition law. Aside from this action, there is need for primal assessment of the industry moves impacts like mergers based on the short term effects on prices to both the short and long term holistic views of all the effects for consumers, including the benefits that might come by as a result of more investment portfolios.
Looking from the viewpoint of the market, which is based on rigid and narrow definitions of services, technologies, networks and national boundaries to a paradigm, which takes to account a full view of the value chain, such a shift taken at the policy level can quite quickly lead to practical changes that refresh the investments in Bosnia and Herzegovina telecoms infrastructure networks and lead to the easy reach of the digital agenda. Policymakers in Bosnia and Herzegovina need to focus more on creating incentives for private investments in telecommunications. This approach implies an increased focus on investments as a strategic emphasis. For example, Bosnia and Herzegovina can inject a few billion as part of additional infrastructure investments in order to boost the growth of the national telecommunications industry to boost growth in the industry.
Recommendations for Turnaround
If the telecommunications sector is to become competitive, there must be a turnaround on the prevailing trends to ensure Bosnia and Herzegovina, and on a larger scale, Europe remains competitive in the global telecommunications and digital marketplace. The first step towards a turnaround is to tackle the regulatory root cause of the telecommunications investments that are declining and investing in the unlocking of the potential value of the common digital market. The objective is to allow for a more efficient and fairer competition, as well as achieve increased expected cash flows, which are available for the investments of the next-generation networks.
While looking at revising the local laws in Bosnia and Herzegovina to enhance the internal synergies of the next generation internet opportunities, one of the extensive and far-reaching steps is the harmonization of the procedures and rules that are required to enable the telecommunications companies operating in multiple European Union to enjoy the full potential of cross country collaborations as well as help to decrease the hurdles for organizations seeking to give European pan services. The harmonization extent needed to pave the way for the introduction of cross-border platforms for network management and information technology is far-reaching and moves beyond the specific regulation at the national level. The harmonized procedures and rules for the protection of consumers across the European Union and the technical processes would make it possible for telecom operators with cross-European operations to realize the additional synergies through the standardization of the information technology processes across different countries and ensuring the implementation of the cross-border information technology platforms (Rossi, 2014 p.20).
Bosnia and Herzegovina operate within the ecosystem of European telecommunications, which is very complex. The infrastructure comprises of several stakeholders that have competing interests. The position of everyone is supposed to be considered. However, there is an urgent need to move forward with the task of ensuring the streamlining, harmonization, and modernization regulations. The longer it takes, the investment hindering distortions constantly remain in place, the further that Europe will fall behind the leading international markets in the digital services or and infrastructure. As these challenges continue, the biggest losers are the economy of Bosnia and Herzegovina and the European Union, the businesses, and the consumers.
Bosnia and Herzegovina operate under the legal framework developed by the European Union. It, therefore, suffers the same challenges of the European Union, especially the unfavorable regulations that are not suitable for growth. To advance, Bosnia and Herzegovina need to enact its own regulations aside from the main regulations of the European Union to enable it to have speedy internet especially move faster than the rest of Europe by making legislations that deter dominance by big players and allowing competitiveness which will spur growth, competition and lower costs for the consumers. The laws must be centered on having the consumers enjoy affordable and fast internet. With the advent of the 5G connectivity, it can move with speed to realize these changes that will enable a higher uptake of the telecommunications products on an increased scale leading to greater opportunities for employment and faster growth of the country. These steps must focus on achieving diversification. Data is an important commodity, and only radical transformation of the business model aided by suitable rules to accommodate a great portfolio of services in the enterprise and digital connectivity domain will generate revenues and expand opportunities through a focus on long term value creation for consumers.
References
Boston Consulting Group. (2017). Reforming Europe's Telecoms Regulation to Enable the Digital Single Market. Home - European Telecommunications Network Operators' Association.
Fildes, N. (2018, October 30). Telecom italia chief bemoans 'market failure' of sector in Europe. Financial Times.
Fry, W. (2020, February 13). New European electronic communications code reforms regulation for telecoms industry. Lexology.
Lancaster, H. (2020). Bosnia-Herzegovina - Telecoms, mobile and broadband - Statistics and analyses - BuddeComm. BuddeComm-Telecoms research on over 200 countries. Find any data.
Rossi, L. (2014). Proposal for the reform of the regulation of digital services.