BH Telecom sees pretax profit flat in 2012, 2013

Wed Dec 26, 2012 9:08am EST

* Flat earnings seen in 2012, 2013

* Unfriendly laws, fierce competition blamed for results

* Telecoms firm to pay unchanged dividend from 2012 profit

SARAJEVO, Dec 26 (Reuters) - Bosnia's BH Telecom expects pretax profits to be flat this year and next, coming in at 148 million Bosnian marka ($100 million) in 2012 on a one-percent fall in revenue to 612 million marka.

General Manager Nedzad Residbegovic said the biggest operator in the former Yugoslav republic faced difficult conditions including an unfriendly law on public procurement, increased competition and political interference while the process of liberalising the market is unfinished.

Sarajevo-based BH Telecom is 90 percent state-owned and its procurements must be announced in public tenders, the procedure for which is often prolonged.

It lost market share in previous years to m:tel, based in Bosnia's autonomous Serb Republic but operating across the country. M:tel is owned by Serbia's state-owned Telekom Srbija but operates as a private company.

"We have seen an enormous competition but only in the Sarajevo area and parts of the Federation," Residbegovic said, implying that Serb and Croat national operators have agreed not to compete in areas they respectively covered.

BH Telecom operates mainly in parts of Bosnia's autonomous Federation dominated by Bosnian Muslims, while HT Mostar, which is based in the southern town of Mostar, operates mainly in its Croat-dominated areas.

The Federation and the Serb Republic are two autonomous regions making up Bosnia.

Still, BH Telecom mobile network users rise by 120,000 to 1.5 million and internet users by 30,000 to 147,500, while its Moja TV service won 30,000 new subscribers, financial director Aida Stainbauer said.

Stainbauer said the company invested 110 million marka in modernisation this year and would pay unchanged annual dividends of 110 million marka from its 2012 profit.

Residbegovic said the company expected unchanged results in 2013. (Reporting by Daria Sito-Sucic; Editing by Patrick Graham)

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