Tele2 hits out at Croatian plans to triple licensing fees

08 May 2014 | Kavit Majithia

Sweden’s Tele2 has hit out at the Croatian government’s plans to triple radio frequency licensing fees for mobile network operators in the country.

According to the operator, the move could seriously harm the business climate in Croatia, the EU’s newest member.

Tele2 competes in Croatia with local players T-HT – majority owned by Deutsche Telekom – and Telekom Austria-owned Vipnet. It has a market share of 20%.

The Swedish operator is aiming to finally turn to profit in the country and raise its market share to 25%, nine years after first entering the market.

“We think the government’s proposal was not well thought through and we hope that it will be reconsidered,” said Malin Holmberg, CEO of Tele2’s Croatian unit.

Holmberg told Reuters that the company is behind in its initial plans for profitability but they are nearly there.

“If the fee is implemented, it would delay our profitability plans for another several years,” he said.

If the fee is implemented it will almost double the corporate tax rate for the telecoms sector, bringing in approximately 350 million Kuna to the national budget – triple the present rate.

Croatia is set to suffer its sixth recession year in a row, and the government is targeting international investment to bolster growth.