At its 35th session held on 15 October 2025, the Competition Council of Bosnia and Herzegovina adopted a Decision assessing as conditionally permitted the concentration resulting from the acquisition of direct control by the undertaking BH Telecom d.d. Sarajevo over the undertaking Telemach BH d.o.o. Sarajevo

The proceedings were conducted in accordance with the Law on Competition of BiH (“Official Gazette of BiH” No. 48/05, 76/07 and 80/09), and after a comprehensive analysis of the market shares of the participants in the concentration on the market for the provision of Internet services, fixed telephony and audiovisual content services, as relevant markets in the production sense of this concentration in the territory of Bosnia and Herzegovina.

The Competition Council determined that the unrestricted implementation of this concentration could lead to the distortion of the market structure and the strengthening of the dominant position of BH Telecom, and approved the concentration in question, subject to the fulfillment of precisely defined conditions and obligations, imposed through six measures, which the participants are obliged to fulfill in order to eliminate the negative effects of the concentration in question on market competition within the deadlines set for their fulfillment.

In accordance with the Law on Competition, participants to the concentration are obliged to:

Measure number 1 – The participants to the concentration undertake not to increase the retail prices of fixed telephony, audiovisual content distribution services and internet services in the territory of Bosnia and Herzegovina, as well as the existing triple and double packages, above the THCI index, which is calculated as follows: THCI = CPI + X where CPI – the official consumer price index for BiH (published by the BiH Agency for Statistics), and X – a corrective factor that reflects actual changes in justified operating costs (OPEX) while maintaining the existing quality of services.

Measure No. 2 – The parties to the concentration undertake that all subscription contracts with a mandatory duration for the provision of fixed telephony services, audiovisual content distribution services and Internet services that are in force at the time of the transaction will remain in force under the conditions under which they were concluded with the parties to the concentration until the expiry of the mandatory duration of the subscription. In the event of changes in terms or prices according to the criteria specified in Measure 1, which are less favourable for subscribers, subscribers have the right to terminate the contract without consequences, in accordance with applicable sectoral regulations.

Measure number 3 – The applicant undertakes that the parties to the concentration will operate as separate undertakings and that BH Telecom will establish mechanisms to ensure the

prevention of the flow of information between employees of the parties to the concentration, with regard to commercially sensitive data, which does not include reporting to BH Telecom, and persons designated by the management of BH Telecom (whose names will be submitted to the independent auditor and the Competition Council) regarding reporting on business results and plans, financial indicators, data necessary for achieving synergistic effects between the parties to the concentration and inter-operator relations with regard to wholesale services.

Measure number 4 – The applicant undertakes that, both independently and together with the Target Company, it will not assume majority control over other economic entities or parts of economic entities, providing telecommunications services, operating on the market of Bosnia and Herzegovina.

Measure number 5 – The applicant undertakes that the undertaking Telemach will not apply for a License for the use of radio frequency spectrum for the provision of services via mobile access systems.

Measure number 6 – The applicant to the concentration is obliged to sell one part of the Target Company (Telemach) within a defined period of 18 months with the aim of reducing the market share of the fixed internet of the undertaking Telemach within Bosnia and Herzegovina by three percentage points compared to the current situation.

It should be noted that until the adoption of this decision, the signed purchase agreement was not submitted, and the legal basis of the concentration in question is based on the signed Letter of Intent.

The Competition Council does not make a decision on the purchase or sale, or acquisition, but rather assesses the intended concentration and analyses the effects that may significantly distort market competition, according to the criteria prescribed in Article 17 of the Law.

This decision is another step in the consistent application of competition rules, and the Competition Council continuously acts with the aim of ensuring equal business conditions for all undertakings and improving market transparency.

The Competition Council, together with the appointed Independent Auditor, will monitor the implementation of the measures prescribed by the Decision and the public will be informed about it in a timely manner.