Growth and innovation involving an expansion into the ‘‘Digital Lifestyle’’ market and new customer segments

As the market leader in both the fixed and mobile telephony markets in Croatia, the growth opportunities for the Group in the traditional business segments are limited. The Group is therefore looking to the broadband and media segments as having the potential to provide growth opportunities for traditional telecommunications operators. The Group’s aim is to maintain its leading position among telecommunications providers in the Croatian market through the introduction of new, technologically advanced and attractive services. It aims to develop and promote attractive, cutting-edge services and solutions in telecommunications and related industries (such as media and information technology) to its customers and, in this way, to increase the usage of advanced services in both the private and business markets.

Expansion of broadband connections and IP-based services

The Group’s growth strategy focuses on the expansion of broadband connections and IP-based services. Broadband connections provide a basis for offering technologically advanced services such as TV and Video on Demand (VOD) via Internet, Voice over Internet Protocol (VoIP), Virtual Private Networks (VPN) etc. Through broadband expansion, T-Com establishes the infrastructure it needs to provide Croatian homes and companies with up-to-date telecommunications services. By promoting the adoption of these services, the Group continues to significantly improve business customers’ operations and the way in which residential customers correspond and interconnect with each other and access and share multimedia content.

Internet and data services for mobile telecommunications is another area of focus for the Group. Through T-Mobile, the Group promotes the adoption of new services that drive the usage of data services, enhance the value of mobile communications to users and provide traffic growth for the Group. The early introduction of HSDPA technology and the planned increases of network bandwidth are initiatives that support this strategic focus.

Introduction of innovative media and entertainment services based on modern technologies

The Group’s strategy is to strengthen its position in the media segment through the development of innovative products and services, as exemplified by T-Com becoming one of the first operators in Europe to offer IPTV to its customers with broadband connections.

ICT related services

T-HT Group is in the process of broadening its service portfolio with integrated telecommunications and IT solutions by developing tailor made solutions for key business customers. The goal of the Group is to be able to satisfy all the communication and IT needs of its business customers.

Prudent evaluation of regional opportunities

The Group has been closely monitoring and evaluating developments in neighbouring markets to identify potential growth opportunities. These include the privatisation of any operator still owned by the Government and positioning the Group as an alternative cross-border operator or as a regional wholesale traffic aggregator. However, the Group’s primary focus will be on developing the investments it has already acquired in Bosnia and Herzegovina. The Group has created a base for expansion into the market of Bosnia and Herzegovina by securing a 39.1% ownership interest in HT Mostar, which has integrated its fixed and mobile business by merging with HT MObilne Mostar. The Group aims to capitalise on this investment in the future by increasing its ownership (although this depends on the privatisation process in Bosnia and Herzegovina) and by participating in the high growth potential of the mobile market in Bosnia and Herzegovina. The telecommunications market of Bosnia and Herzegovina was liberalised in 2006 and, given the current low level of development, the market is expected to grow faster than certain European markets in the coming years.