Since independence until 2007, Croatia enjoyed moderate but steady GDP growth between 4% and 6% led by a rebound in tourism and credit-driven consumer spending. In 2013 Croatia joined the EU, and it remains a member of the European Exchange Rate Mechanism until it meets the criteria for joining the Economic and Monetary Union. EU accession has increased pressure on the government to reduce Croatia’s relatively high public debt. The government has also sought to accelerate privatization of non-strategic assets, with mixed success. New growth is expected for the coming years as the Croatian government’s reform plan is implemented, aimed at joining the Euro-zone sometime in the mid-2020’s.
The Internet penetration rate increased to almost 92% by the end of 2018. The telecommunications network has improved steadily in the last years, covering much of what were once inaccessible areas. Trials for 5G technologies have been underway since 2018. Despite the fact that fixed broadband is available to 97% of households, 39% of them do not yet subscribe to it. Moreover, Next Generation Access technology is available to 57% of homes, which is below the EU average. While 61% of the households have a broadband subscription, only 1.1% of the fixed Internet subscriptions are to high-speed connections (26% in the EU).
The telecoms market in Croatia has been formed by the conditions imposed when Croatia became part of the European Union in 2013, a process which opened up the market and the creation of a regulatory environment leading to competition. The mobile market has one of the highest penetration rates in the Balkans. Smaller operators as well as the incumbent telco are investing in network infrastructure to support bandwidth-intensive services. In common with developments elsewhere in Europe, investment is being earmarked for fibre and mobile infrastructure while the fixed-voice market continues to dwindle. The Croatian Regulatory Authority for Network Industries (HAKOM) is devoted to the task of promoting stability, competition, and growth in the electronic communications and postal services market.
After some encouraging economic growth following the independence war in the 90’s, Croatia experienced an abrupt slowdown in the economy in 2008; economic growth was stagnant or negative in each year between 2009 and 2014, but has picked up since the third quarter of 2014, ending 2017 with an average of 2.8% growth. Challenges remain including uneven regional development, a difficult investment climate, an inefficient judiciary, and loss of educated young professionals seeking higher salaries elsewhere in the EU. Tourism is one of the main pillars of the Croatian economy, comprising 19.6% of Croatia’s GDP. Croatia is working to become a regional energy hub, and is undertaking plans to open a floating liquefied natural gas (LNG) regasification terminal by the end of 2019 or early in 2020.
T-Hrvatski Telekom (T-HT) is the leading provider of telecommunications services in Croatia. Originally called Hrvatske Telekomunikacije, after its merger with T-Mobile Hrvatska (the Croatian branch of German T-Mobile), the current name was adopted for the new corporation and operations were integrated into one, fully customer-oriented organization in 2010. T-HT is the market leader and the only company in Croatia providing a full range of telecom services, fixed-line and mobile telephone services, data transmission, internet and international communications.