T-Hrvatski Telekom is the national telecommunications company in Croatia

Croatia

Croatia , officially the Republic of Croatia , is a unitary democratic parliamentary republic in Europe at the crossroads of the Mitteleuropa, the Balkans, and the Mediterranean. Its capital and largest city is Zagreb. The country is divided into 20 counties and the city of Zagreb. Croatia covers ...

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Croatian Telecom was formerly the telephony branch of the state-owned monopoly

Monopoly

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

 Hrvatska pošta i telekomunikacije; HPT (Croatian Post and Telecommunications), which was split into two parts in 1999. Both parts, 'Hrvatska pošta; HP' (Croatian Post) and 'Hrvatske telekomunikacije; HT' (Croatian Telecommunications), remained state monopolies in their respective fields.

History

Croatian Parliament decided to privatize Croatian Telecommunications while maintaining equity and monopoly. In the vote taken on 10 June 1999, members of the opposition parties voted against this move together with Mr. Juraj Buzolić, a member of ruling Croatian Democratic Union

Croatian Democratic Union

The Croatian Democratic Union is the main center-right political party in Croatia. It is the biggest and strongest individual Croatian party since independence of Croatia. The Christian democratic HDZ governed Croatia from 1990 to 2000 and, in partial coalition, from 2003...

 at that time. The initial decision was to sell 36% of the stock to a foreign party, keep 30% in government portfolio, sell 7% to the employees, and grant 7% to the war veterans. In October 1999, through the advisors to the Croatian government, Director Pascal Najadi and his bank Dresdner Kleinwort Benson (Reportedly Najadi and his firm Dresdner Kleinwort Benson also arranged an emergency stabilisation finance package in the tune of Euros 100 million during the April 1999 NATO campaign, hence prior to the HT stake sale deal with Deutsche Telecom, the NATO bombing was aimed at neighboring Serbia & Montenegro and critically hampered neighboring Croatian Tourism bookings for the period running up to the summer business, in order to balance the loss of anticipated tourism revenues for 1999), Deutsche Telekom

Deutsche Telekom

Deutsche Telekom AG is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Europe....

 bought 36% share for a total of 850 million US dollars. The deal was widely anticipated by market participants as big success and the last top telecom privatisation in the region. Subsequently, Croatian Telecommunications changed its logo and the entity was renamed 'Hrvatski Telekom' or short 'HT'(Croatian Telecom).

Recent years

In October 2001, a new Croatian government, composed by a coalition of six parties reached an agreement with Deutsche Telekom selling an additional 16% share of Croatian Telecom. Deutsche Telekom thus became the majority shareholder. The government quickly proceeded to change the rules and regulations of the Croatian telecom market in order to extend the monopoly of the Croatian Telecom in the field of fixed telephony until 2005. This contract included certain additional arrangements, which were kept as an 'official secret' and have not yet been disclosed to the public.

Since becoming majority shareholder, Deutsche Telekom has imposed excessively high prices for fixed telephony services, the broadband Internet access, and introduced enormous fees for interconnection in order to discourage competitors.

Similarly, in the field of mobile telephony, together with the second mobile provider VIPnet

VIPnet

Vipnet is the first private mobile network operator in Croatia. It has been operating a GSM network since July 1999.Since its arrival, Vipnet has broken the monopoly of CRONET and introduced many new services unknown before - SMS, prepaid and others...

 (which was the only other operator at the time, making the market essentially a duopoly), Croatian Telecom raised interconnection fees provoking rumours about a price fixing

Price fixing

Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...

 of these two companies.

In October 2004, Deutsche Telekom rebranded it as T-HT (adding the "T-" prefix to most subsidiaries such as T-Com and T-Mobile), and spent huge amounts of money on TV, paper, and billboard advertising.

In May and June 2006, T-Com bought Iskon Internet, the second largest Croatian Internet Service Provider

Internet service provider

An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...

. While the vast majority of Croatian public and media, the Croatian Telecoms Agency and the European Commission

European Commission

The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

 all felt that this was an overextension of the monopolistic company that should be prevented, it was not illegal (as judged by the Croatian Agency for the Preservation of Market Competition) because under the current antitrust law, a company can be bought without breaking the rules of market freedom if its yearly revenue does not exceed 100 million kuna, and Iskon's profit was under that level. This acquisition increased T-HT's market share in Internet services from 67% to 83,9%.

In 2007, the Croatian Government decided to put up 20-23% of T-HT stocks to be sold to the Croatian public, following the successful public offering of INA stocks a year earlier. Because of big interest of Croatian public, on September 24, 2007 the Government decided to increase number of stocks offered in IPO to 32.5% (25% to Croatian citizens and another 7.5% for investment funds). On October 5, 2007, the T-HT stock started trading at the Zagreb Stock Exchange

Zagreb Stock Exchange

The Zagreb Stock Exchange or ZSE is a stock exchange located in Zagreb, Croatia. It is Croatia's only stock exchange. The exchange trades shares of Croatian companies, as well as bonds and commercial bills....

 as HT-R-A and also at the London Stock Exchange

London Stock Exchange

The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...

 through a GDR

Global Depository Receipt

A global depository receipt or global depositary receipt is a certificate issued by a depository bank, which purchases shares of foreign companies and deposits it on the account...

.