Can you briefly explain to us the role and the mission of the CRA in the country?
This agency has been present here, in one form or another, since 1998. At the beginning there were in fact two agencies, and they were joined at the begging of last year as a single agency - the Communications Regulatory Agency. It is a unified regulatory agency; it regulates both broadcast of media and telecommunications. One of the reasons that it has been formed and one of the key objectives is to make sure that everything we do meets the guidelines of the European Union. We are not an accession country, I think it is the correct term, but we are one of the countries that want to get into the EU. So, everything that is being set up here now, is being set up with the EU membership in mind. Therefore, this agency closely follows the European telecommunications guidelines.
The government sets the policy, but, we, as an independent regulator, implement the policy by creating the required regulatory environment and advise the government, the policy maker, on it. I think that the aim of the European policy is to create the orientation on the direction that one might go to develop certain things. But it is independent of the government. It is also important to know that our finances are also independent of the government. Our finances come from the companies that pay for the telecommunication license of Bosnia and Herzegovina.
How would you define the state of the telecom sector in BiH?
We do not want to have over-regulation, like they do in Europe. The first elements of regulation we had were affecting broadcasting, but our primary concern was telecommunication. So, we moved on into telecommunications, to the key issues of getting an agreed set of policy. We have fulfilled all the requirements to enable data liberalization, excluding voice over IP and authorising ISP, Internet Service Providers, what we are involved in at the moment. We are currently in the final consultation phase for the fixed line operator's license. In fact there are three fixed line operators here in this country. One of them is HPT Mostar, I understand, is separating the postal services away from the telecom services so it will soon become HT Mostar. You can't privatize it as telecom if it is also dealing with postal services. So, those fixed line operators will soon agree and sign a fixed line license. We have recently been assisting them with interconnection agreements, and we hope to have it ready within a few months. On the level of GSM operators, there are currently two of them, fully licensed by us. We were asked to license GSM operators as fast as possible.
This document made it clear that, if those operators were publicly owned, they should receive a GSM license. As a result Telecomm Srpska, and what is now GSM B&H have full licenses. Those licenses contain very strict requirements on costumer information, as well as on coverage. Both operators are required to cover at least 80% of the population of the country within the three years of getting the license. The licenses were issued at the end of April of last year.
What is the purpose of this 80% coverage requirement?
Bear in mind that they originally intended to cover Republika Srpska and the Federation with no connection between the entities. They are required now to become national GSM operators with a full coverage of the country.
How did the operators cope with this requirement?
There were several issues, like how can we force an operator from Banja Luka to come to Sarajevo and set up their base stations here, but it all happened very smoothly and now we have an operator called Mobilna Srpska, that covers Sarajevo from a broadcasting station. It is not just the telecom operators who can offer you sites for your antennas, but some other broadcasters also.
I don't think that the operators can not reach the 80% limit in three years, bearing in mind the population distribution of this country, you have a few major centres and if you cover them, your population coverage is high already. The coverage of roads is another issue and that is included in the license that they should cover certain key roads. So far the operators have not complained about these requirements.
Does that force them to work together?
I think that the interconnection agreement will force them to work together even more. The license offers them the ability to share facilities between the competing companies up to a limit of 40%.
Is there still a place for a third GSM license?
If there is a place in a population of four million, with an economy that is just starting? Yes, there probably is. But, economically you may think that it is difficult.
I hope and I believe that foreign investors will be interested in that 3rd licence. But now it is not the best time to go to the market when major companies are consolidating. But yes, we have serious interest and this week I've had two operators asking about the possibility of the 3rd license. So, the answer is yes.
Regarding the fixed line market how do 3 operators work together?
That is where the interconnection agreement comes in, and that is developing quite fast. We have to put everything in a legitimate frame, so that the operator cannot be bypassed.
Do you think that the telecom infrastructure is sufficient enough, or does it need further improvements?
Let's look at it from the GSM side. One of the most impressive things about GSM licence is that it requires a serious investment but at the same time it brings in serious revenues. But that is the good part of the business. If we look at the fixed line operators, at one time it was stated that this country needs two billion Euros of investments to bring the telecommunication services up to the standards of Europe. 1,4 billion, or 70 % of that money would be investment into the local loop. That investment is huge and even if you are rigorous with your universal service obligation, it is very difficult to see how you can get your investments back in time. However, one of the opportunities this country has is to use more economic means of covering the rural population, by using the radio frequencies of one of the local loops. And that is why we were advising it as a possibility. There are a lot of new opportunities here with regards to internet for example; many people are aware of the possibilities that the internet offers and I am confident that once they will have the opportunity to use it they will take advantage of it and you will be surprised how fast they will develop.
| For the future of the sector what can you tell us about the 3rd generation in mobile phones in BiH?
The spectrum is clear for it, and as soon as the policy maker indicates that they want 3G technology, we can move ahead. I think that the third generation licence is an opportunity that will be taken, probably in two year's time. I cannot see it immediately. The license fee, as I said, pays for the functioning of that agency and what is left over that amount goes to the Treasury Ministry at the state level.
What is your role as far as broadcasting is concerned, and what is the potential of the sector?
I think the simplest would be to go back when we started. At the beginning, our main aim was to stop the broadcasting of hatred and inflammatory like propaganda, that was the case in 1998 or 1997. SFOR reacted very quickly and they blow up some transmitters, but they turned out to be the wrong ones. So, we had to find another way to get regulations. We started by setting up the so-called Independent Media Commission with a task to stop the broadcasting of hate and to bring the broadcasters of the country under control. Again, this was set up on the state level. First, we asked everybody who was broadcasting, who they were, so we could tell where the broadcaster was. This was the requirement for them to get a license. That was the only way to find out who, and where the broadcasters were. Otherwise, they would not have told us their identities. It is not a huge country, but it is very difficult to track down broadcast transmitters situated in, lets say vans. In this way we gained a lot of time. We said in our phase one broadcasting, tell us who you are and we'll give you a licence. All signed licences, were according to the codes and rules. And we were then able to take the rule of law and tell them if they were contradicting to the broadcasting law, and in some cases we threatened them with sanctions. We are a regulator not a censor. They were required to keep a two-week program material. During these two weeks if we has receive complains from anybody we would ask them for the tape of the transmission to investigate.
Getting everybody a license was the quickest way of stopping the broadcast of hate and we only had to use the ultimate sanction, which is instant shut down, twice. We submitted each case to an enforcement panel, which took a decision that could range from minor fines to major ones up to 5 000KM, to shut down the station for a certain period or even permanently. Those decisions could be appealed in our council.
This was phase one. As soon as we got everybody listed, we started with phase two, which is a merit-based system, according to which you need to apply for a license within your region. There were at the peak, nearly 3000 broadcasters in this country, with very poor quality, so once you passed the standard requirements, you had the possibility to get a licence in an area that you wanted.
Were they any problem of interference with the military frequencies?
Yes, they were. So, the clarification of the technical aspect was one of the key elements. We are just now considering the value of phase 1 and 2. The key value is that they stopped broadcasting hate. We stopped the so-called spectrum anarchy. We have cut down the number of broadcasters significantly. We are presently moving into the next phase, and that is trying to assist local communities to get local information services. The key part will be the ability to demonstrate financial sustainability no matter what licence they are applying for. That comes back to the basic point of business - if it is not a business we will not license it.
Do you know of any broadcaster who would like to break into the media market?
We are trying to attract people and that is part of our consultations in phase three. We hope that there will be an infrastructure opportunity brought here in the near future. But, it is a matter for the politicians to agree on. We are trying to encourage that. If we could do that, the existing infrastructure will improve. We are delighted to see that as a result of our lobby the ITU is holding a regional broadcasting conference in 2004, which will bring the agreement between countries in the region on the digital broadcasting etc.
What is your social contribution to the country?
As a regulatory agency we cannot use our money because it comes from the license plans. We are firm in advising the government on ICT policy, Information and Communication Technologies policy, and this is the way forward.
But what is a priority between education and housing is not a matter for the regulator. It is a matter for the government to determine. I am delighted to say that one of the most important developments in the last month has been the creation of the ICT policy group by the government.
The young people here are very competent and eager, but sadly, they left because there is more money to earn oversees. They have skills and to bring them back will be one of the priorities for the government.
You are at a crossroad between the Public and Private sector. Isn't it a difficult position?
No, I do not see it like this. I see that in terms of broadcasting, in terms of media. But in terms of telecommunication, I do not see it. Because our role is to ensure that there is an open competition and therefore we stick to the three European competition principals. First one is a monopoly. There, the regulator primarily acts directly in the interest of the consumer and is there to protect the consumer. The other extreme is the open market and there you can argue why you need a regulator at all. Because if you got an open competition why do you need regulation? We would say: only to ensure that the competition is fair. But in the middle, you have the situation that we have here - a dominant operator and two smaller operators. Now they are all public, but they will be private soon. As far as we are concerned, it is the user that matters. Therefore if there is a dominant operator who is abusing his position we will try to reset the balance. What we don't have yet and hope to have in the next few months is to have a closer monitoring of the market than the one we have at the moment.
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