Data Centres To Outperform During Recession

BMI View : Our bearish outlook for the Croatian economic recovery feeds into our low growth expectations for the country's IT market. However, we see opportunities in the cloud computing and data centre markets, as companies look to outsource ICT infrastructure in order to create cost efficiencies.

Croatia's largest telecoms provider, T-Hrvatski Telekom (T-HT) has opened a data centre in Zagreb, following a HRK62.5mn (USD11.25mn) investment and a partnership with Koncar Group. According to the operator, it will be able to offer users accommodation in the data centre, as well as remote monitoring and management of ICT infrastructure, allowing for cost efficiencies and optimal equipment operation.

T-HT's parent company, Deutsche Telekom, has sought to increase its presence in the IT market by leveraging existing network infrastructure to provide IT services, such as cloud computing, throughout its European markets. It is therefore of little surprise to BMI that T-HT has begun to invest in its own ICT business as well, as this segment has shown solid growth over the last two years, amid a stalling Croatian economic recovery. In 2013, revenues for T-HT's ICT business increased by 25.5%, partly as a result of low base effects but also because of the growing portfolio of cloud solutions offered by the company. ICT is gradually beginning to account for a larger portion of the company's total revenues, rising from 5.5% in Q113 to 7% in Q114.

ICT Revenues Growing Amid Slowing Economy
T-HT ICT Revenue Indicators, 2012-2014

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Geography: Croatia