Željko Batistić (United Grupa): With due respect to the competition, we will become a leader in the telecom market

Željko Batistić, Vice President for Technology and one of the leading figures at United Group, is an accomplished telecommunications expert with 23 years of experience gained at Ericsson, B.net, and for the last 10 years at United Group, initially as CEO of Telemach BiH and for the last five years in his current position. An electrical engineering graduate and MBA holder, originally from Korčula and currently residing in Milan, Batistić has extensive experience across all markets of United Group – Bulgaria, Greece, Serbia, BiH, Montenegro, Slovenia, and Croatia – in assessing acquisitions, managing, and enhancing service quality through technological and operational development of companies. He speaks to Lider about United Group’s ambitious plans in the Croatian market, which is practically dominated by a duopoly of HT and A1.

What does the investment cycle of 1.7 billion kuna for the modernization of mobile and the construction of an optical network in Croatia encompass? What are the timelines for realization?

– Telemach Croatia is building the convincingly fastest symmetrical optical network in Europe at 10 gigabits, with speed and quality comparable only to networks in South Korea and Singapore, the world record holders when it comes to internet speeds. Even today, thanks to the existing infrastructure, we can support internet speeds of up to 10 gigabits in fifteen thousand households in New Zagreb, and by the end of next year across the entire area of Zagreb. Thanks to our investments in infrastructure, Zagreb will become the first 10-gigabit city in the region. Following Zagreb will be Osijek, and then other major cities – Zadar, Split, Rijeka. By the end of 2022, about 170 thousand Croatian households will be covered by a 10-gigabit optical network. Thanks to the experience and knowledge of the local team, we plan to connect around 100 thousand new households to our optical network each year, aiming to cover as many as 500 thousand households and businesses across Croatia in five years. Our intention is to cover 40 percent of households in Croatia, but we are ready to invest more than that 1.7 billion kuna, and the pace of investment will also depend on the speed of issuing permits, etc. The future technology we are implementing first in Croatia can be upgraded to future standards of 50 Gbsp and 100 Gbps, so despite the annual growth of internet traffic of 20 to 30 percent per household, our optical network will be ready to follow and support the growth of internet traffic for the next ten years and beyond.

At the same time, work is underway to introduce the 5G network; what are the expansion plans in the context of competition, which has also thrown all its cards on 5G?

– We have already launched the first 5G base stations in Zagreb and Osijek, and within less than a year, the 5G signal will be available throughout Croatia. By the start of ‘Advent in Zagreb’, we will cover the entire capital with the 5G network, followed by other major cities. In the next five years, we plan to invest an additional nearly one billion kuna in modernizing the mobile network, which will mean increased coverage, significant quality improvement, and the introduction of ultra-fast 5G technology. Such a level of investment demonstrates the seriousness of our intentions. Telemach’s investment plan includes increasing capacity by about four times in the next five years, with a 100 percent increase just in the current year compared to the end of 2020.

Telemach has the ambition to become a market leader; is this realistic given the strength of the two largest players, HT and A1? Which segments will you focus on?

– With due respect to the competition, the fact is that there have been no major investments in telecommunications infrastructure in Croatia for over ten years, which is confirmed by the fact that we rank 77th globally in terms of broadband infrastructure, with an average of 55 Mbps, and are at the bottom in the EU. Additionally, according to recent reports from the regulator, about 60 percent of users on the fixed network do not have internet speeds greater than 30 Mbps available. We have come to change things for the better. When serious competition arises, such as Telemach in Croatia, I expect other operators to start investing more strongly. Our goal is to become a leader, and of course, there will be obstacles along the way, but with a strong and proven team of local experts that is continuously growing, led by Adrian Ježin, and with the investment and experiential support of the Group, I am confident that we will succeed. I would emphasize that we are also the only telecom with local management. Adrian and I worked together at B.net, and we have exceptionally vast experience in building a flexible operator that is aggressively expanding.

Thanks to our rich experience and significant resources we are investing, we have quickly become the fastest-growing operator in Croatia. Croatian users will soon have the privilege of using the convincingly fastest optical network in Europe. Our promises are firmly grounded, and we will prove that we are serious.

The fact that we are the last to enter the fixed market is our advantage because it means we have the latest 10 Gbps technology at every connection we build. On the other hand, within less than a year, we will cover all of Croatia with the 5G signal. Already this autumn, residents of New Zagreb will be able to boast the fastest internet speeds in the country – as the entire neighborhood will be simultaneously covered by 5G mobile and 10-gigabit optical networks.

When we say we have come to Croatia to become a telecommunications leader, it means that we will always have the most innovative and highest quality services, on the most modern infrastructure, with the best customer experience at a very competitive price, meaning we offer the most for the money. The natural consequence of this will be that we grow the fastest compared to competitors in all segments, mobile telephony, where we have already achieved this, and fixed telephony, internet, pay TV, and convergent services for business users. I expect further attempts to hinder our growth with not always market-based methods, but fortunately, we are part of the EU, and such methods will not easily disrupt us.

With the change of the Law, the main obstacle to the acquisition of Optima Telekom has disappeared. When should the transaction be concluded?

– Yes, the Law has been changed, and I expect that we will receive approval for the acquisition shortly. Our acquisitions are very focused on the synergies we see in the products we offer, sales, network, technical systems, shared space, so you can expect very rapid integration of Optima into Telemach and a joint approach with a portfolio of services and networks across a wider area of Croatia with a much greater perspective for Optima users than has been the case so far. For us, the most important thing is the customer base and the backbone we gain. We plan to transfer those users to our network and offer them much better service than they have had so far.

Is United Group continuing to acquire?

– United Group is very committed to Croatia as it represents one of our key investments. Significant funds have been invested in the acquisition of Nova TV, the construction of N1, the acquisition of Tele2 and Optima, frequency spectrum, and infrastructure. All of this makes United Group, which is owned by the BC Partners fund, one of the larger foreign investors in Croatia. So far, we have had four different funds under ownership, and all have multiplied their capital several times. The core management of the Group has been the same for the last 20 years, but never has more been done in a short time than in the last two years. We are currently finalizing the consolidation of the operators we have acquired in Bulgaria and Greece, where we are waiting for approval for a new major mobile acquisition (Wind). At the same time, we are actively monitoring potential new acquisition opportunities across the broader EU area, and even globally. We are considering acquiring some smaller players in Croatia.

Read the entire interview in the printed and digital edition of Lider.

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