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Sweden Complains to BiH Government for Changing Rules of Telecom Policy Midway

Bosnia and HerzegovinaPosted by Chambers of Commerce Sweden - Southeast Europe Mon, February 25, 2013 17:39:44

Sweden, through its Ambassador to Bosnia and Herzegovina, recently reacted strongly in a letter to the Bosnian government regarding a sudden and un-advertised change of Telecom policy, resulting in severe negative effects for a Swedish telecom company (and most possibly others) about to invest and start operation as a Virtual Mobile Network Operator (MVNO) in BiH.

An MVNO is a mobile operator that builds his own switching and customer care system, but hires air time in one or more of the incumbent operator´s radio network. Obvious benefits are better utilization of the incumbent´s network and more competition, resulting in lower prices and better services for the end users. A real win-win situation. In BiH there is another interesting advantage with a ”neutral” operator as an umbrella over the three other ethnically influenced incumbents, which would most likely diversify the use of the networks among the ethnical groups.

So when the Telecom law of 2010 invited operators to apply for a licence to run an MVNO in BiH, a highly competent and experienced Swedish telecom company set out for starting up as an MVNO operator. They sent in an application fully compliable to the specifications made up by CRA, the state´s regulatory body, they registered a company in BiH and started a search for local technical and marketing expertise . A number of people worked hard to start to transfer telecom and marketing know how from Sweden to Bosnia.

Then the Bosnian government suddenly changed the rules of the game, stating that the three existing operators will remain alone on the mobile market until further notice. How come?

Such an act is definitely not what you expect from the government in a country aspiring for EU membership and in dire need of foreign investments. In such a situation you are instead expected to open the market and welcome competition. And most important of all – stick to the rules! Who would otherwise dare to invest in a market?

The Swedish government, who is in support of the EU enlargement in the Balkans, is carefully monitoring Bosnia´s progress in the process of fullfilling the EU requirements. The Swedish Ambassador consequently reacted very strongly upon the Bosnian government´s change of rules mid game and sent a letter to the Minister of Communications and Transport. In the letter the Ambassador writes ”At the end of the day, of course, it is the end-users in BiH – i.e. its citizens and businesses – that suffer the most. Consumers should be able to pick the most cost-effective and affordable product. A range of EU laws and regulations underscore this fact.”

The main objective of the Chamber of Commerce Sweden – SEE is to promote trade between Sweden and countries in the Balkan region. We have an obligation to report to our members about business opportunities as well as obstacles and risks and therefore choose to publish the letter with permission of the Swedish Ambassador to BiH, H.E. Mr Bosse Hedberg.

Let´s hope that the government of BiH will understand the message, so that future foreign investors from Sweden and elsewhere can feel confident that laws and regulations will be honoured also in Bosnia and Herzegovina. A country that probably needs its investors more than most others.

The letter from the Ambassador of Sweden can be viewed here in English and here in Bosnian language.

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