BH Telecom sees weak economy shaving 4 pct off 2014 net profit

SARAJEVO (Reuters) - Bosnia's BH Telecom expects 2014 net profit to fall by more than 4 percent to 113.4 million Bosnian marka (45.68 million pounds) as a weaker economy dents its revenues and cuts the number of fixed-line subscribers.

General Manager Nedzad Residbegovic said revenues were expected to fall more than 2 percent to 580 million marka, with operating costs rising 1.4 percent to 466.7 million marka.

"We do not expect any change next year unless the economic environment improves," he told reporters on Tuesday.

The majority state-owned operator has seen the number of fixed-line subscribers fall by nearly 25,000 this year to 412,463. On the plus side, mobile network subscribers rose 6.8 percent to 1.6 million and Internet users jumped by almost 8 percent to 181,045.

"We have managed to retain the position of the dominant telecom operator in Bosnia with a market share of 45.55 percent in fixed-line telephony and 46.54 percent in mobile telephony," said Hamdo Katica, executive director for development.

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

Its main rival is Banja Luka-based m:tel, majority owned by Telekom Srbija and operating mainly in the autonomous Serb Republic. Its market share for the whole of Bosnia reached 34.7 percent in fixed-line telephony this year and 40.4 percent in mobile.

Residbegovic said BH Telecom would pay a dividend of 80 million marka, down from 110 million marka a year before.

(Reporting by Maja Zuvela; Editing by Zoran Radosavljevic and Mark Trevelyan)