Croatia about to recieve a second fixed line telephone operator!
After a decade-long systematic theft of Croatian citizens, Croatian monopolistic telecomm is about to get competition. On 11/19/2004 Council of Croatian Agency for Telecommunications granted the license for public telephone service in fixed network to company Optima Telekom, owned by Ronald Zuvanic, former minister of maritime affairs, traffic and communications.
Hundreds of pages of text could be written about the current Croatian fixed operator, and it still wouldn't be enough to encompass all affairs, scandals, swindling and countless other ill practices that are associated with it. Here is a brief recap:
Many decades ago the government of the Socialist Republic Croatia founded a state-owned company (well, all companies were state-owned back then - it was the era of communism) HPT - Croatian Post and Telecommunications. This company began to provide fixed line telephone services to Croatian citizens. It was built entirely with people's money - back then, a fixed phone line costed up to thousand dollars, and the company made millions as more and more Croats purchased telephones.
In 1991, when socialist Yugoslavia collapsed, HPT, already a huge and incredibly wealthy company with hundreds of thousands of subscribers, was left in hands of the new Croatian government. As privatisation of state-owned companies began, people naturally expected that HPT would be sold cheaply to Croatian workers - after all, it was with their capital, with capital of Croatian people, that the company was built and developed into such a mastodont. However, the government had other plans.
Years of mismanagement, theft and corruption led to a a deep economic crisis in 1999. The government urgently needed fresh funds, and what better way to get funds than to sell Croatian national wealth to foreigners? By directions of prime minister Zlatko Matesa and the cleptomanic minister of finances Borislav Skegro, HPT was divided into two companies - Croatian Post (HP), a bloated and inefficient socialist mastodont choking in debt, and the rapidly-growing, highly-profitable Croatian Telecommunications (Hrvatske Telekomunikacije, or HT for short). Croatian Telecommunications, or HT, had three branches - 'regular' HT (fixed line operator), Hinet (ISP) and Cronet (mobile phone operator). After the division, a large percentage of HT stocks were sold to Deutsche Telekom (German fixed operator) for a multibillion sum. However, details of the contract between the Croatian government and DT management were kept secret from the public, and people already began to have their doubts. Most were optimistic, though, and expected the influx of German capital and expertise to benefit the company and lead to quicker technological development in all fields of communications. Croatian online surfers (who were still quite a rare breed at that time) already had wet dreams about introduction of cheap broadband communications. However, they were all dead wrong.
In January 2000 a new regime replaced the old one - more democratic, more fair, more honest... or so we foolishly believed. The status quo in Croatian telecommunications was maintained until 2001, when time came to sell another large portion of HT stocks. This was the moment when more dirty laundry of the former government began to surface - namely, the contract from 1999 apparently contained a stipulation that the next portion of HT stocks had to be sold to DT! This would give the German company the major share in HT and an effective monopoly in Croatian telecommunications market. To shock and disbelief of all public experts and analysts, the government signed a new, extremely favorable contract with DT (favorable for DT - for Croatian people it was absolutely disasterous), giving it a major share of HT and a bunch of other privileges. Though this contract (many clauses of which are glaringly illegal and unconstitutional) was (and still is) kept in secrecy as well, some details from it leaked into the public and more insightful people began to see true extent of the outrageous fraud our government played on its citizens.
Namely, one of the clauses in the contract guaranteed DT a monopoly in fixed line communactions for another five years! You read right - our government legally bound its citizens to pay outrageous prices in telecommunications, even though HT had been built over the years with people's money! Not only that, but DT were free to alter prices and tariffes of public communications however they desired, and there wasn't a single stipulation that would force them to invest some of their revenues in company's development.
DT, of course, took full advantage of the situation. Immediately after the contract was signed, they increased prices in fixed line communications by 300%, introduced a huge monthly subscription fee for fixed lines and halted all investments in technological development. Over the past four years, not a single penny was invested in development. Multibillion dollar yearly revenues were systematically funneled out of the company to Germany, were they were used to service debts of Deutsche Telekom, debts that were created through poor management under circumstances of a free, competitive (read - non-monopolist) telecommunications market! HT (rebranded from "Hrvatske Telekomunikacije" to "Hrvatski Telekom") stopped employing young domestic telecommunication engineers (and Croatia's engineers are among the finest in Europe) and instead became a training ground for third-class German 'experts' whose incompetence caused Croatia to fall even further behind other transitional countries when it comes to fixed telecommunications and internet technology. HT eventually introduced 'new' technologies like ISDN (which they had the audacity to advertise as 'revolutionary' even though it was introduced five years after most western countries had declared it obsolete), but all equipment was outdated and malfunctioning crap they dragged in from Germany. But never mind, what's important is that they spent millions on rebranding the company once again this year, so now it's called T-Com, its mobile communications branch is called T-Mobile and its ISP is called T-Online.
This unbearable situation lasts even now. Though there is slim hope that the decision of the Council for Telecommunications to give the secondary license for fixed telephony to Optima Telekom will lead to liberalisation of the market, that isn't very likely. The market of mobile communications (cellular phones) was liberalized in 2001, when HTmobile (formerly known as Cronet, now known as T-Mobile) received competition in form of a joint Austrian-Croatian venture VIPnet. Arrival of VIPnet led to a one-time major decrease in prices and introduction of new mobile services and technologies. As a result, Croatia now has very sophisticated mobile communications and is one of technological leaders in that field on global scale - we were one of the first countries in the world to introduce GPRS, EDGE, MMS, UMTS and a number of other novelties. However, rapid technological advance wasn't accompanied by a gradual decrease in tariffes and subscription fees. Quite the contrary, T-Mobile and VIPnet formed a secret illegal cartel and agreed to boost prices of inter-grid SMS messages, so it now costs 20 cents (instead of 4 or 5) to send an SMS from a T-Mobile cellphone to a VIPnet cellphone and vice versa. This alone generates millions of dollars of monthly revenues for both T-Mobile and VIP, because SMS is one of the most popular forms of communication in Croatia. These allegations are currently under investigation by the State Attorney (who is undoubtedly on DT's payroll).
Another very suspicious detail about Optima Telekom is the fact that its president and founder is Ronald Zuvanic, who was minister in the government until 2004 (yes, in that same government that signed the criminal contract with Deutsche Telekom). In 2003 his government issued the license for second fixed line operator to a company called Divan, though that decision was never made official. However, in the last month of his mandate, Zuvanic cancelled the already-issued license without explanation. Then, mere months later, Zuvanic founded his own company, Optima Telekom, and applied for that very license! As if that isn't enough, the fact that the current government's Council for Telecommunications decided to issue him the license so quickly is also quite indicative. Namely, Optima Telekom was not the only applicant, and other companies that applied for the license offered even better terms in their applications, particularly for their subscribers (i.e. Croatian people) - namely, Optima Telekom's application is the only submitted application that doesn't mention (much needed) decreases in prices and fees... It is quite obvious that this fradulent contest for the secondary fixed operator was nothing but another attempt to perpetuate the endless swindling and shameless robbing of Croatian citizens. The only thing that can put a definitive stop to this is European Union and its strict anti-trust, anti-monopoly laws. However, EU is still far away for Croatia, and patience of its citizens grows thinner with each filthy billion that lands into pockets of corrupt politicians and DT managers.