T-Hrvatski Telekom

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The new T-Hrvatski Telekom logo, subsequent to the DTAG acquisition.

T-Hrvatski Telekom (T-HT; T-Croatian Telecom) is the national telecommunications company in Croatia.

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

On 10 June 1999, Croatian Parliament decided to privatize Croatian Telecommunications while maintaining equity and monopoly. Members of opposition parties voted against this move together with Mr. Juraj Buzolic, a member of ruling Croatian Democratic Union 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 during the April 1999 NATO campaign, hence prior to the HT stake sale deal with Deutsche Telecom, aimed at neighbouring Serbia & Montenegro in order to balance the loss of anticipated tourism revenues for 1999), Deutsche Telekom 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).

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. The deal was obviously a result of a desperate financial situation that the government found itself in, due to gross fiscal irresponsibility. 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 VIP (essentially a duopoly), Croatian Telecom raised interconnection fees provoking rumours about a price fixing of these two companies. These rumors are further supported by the fact that the third service provider in this market is subject to government permission rather than any sensible market conditions.

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 doing so, it spent huge amounts of money on TV, paper, and billboard advertising -- an act seen by many users as a provocation, since the company still enjoys a government-protected monopoly.

In May and June 2006, T-Com bought Iskon Internet, the second largest Croatian Internet Service Provider. While the vast majority of Croatian public and media, the Croatian Telecoms Agency and the European Commission 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%.