The ongoing process of liberalisation of the European Union telecommunication sector influences certain changes in the field of fixed telephony services in Bosnia and Herzegovina. A major objective of this thesis is to present current situation in Bosnia and Herzegovina within the prism of the legal instruments in the light of relevant European Union directives. The main idea behind the process of liberalisation is to achieve highly competitive market drawing the benefits for the end users. Market liberalisation and privatisation are major challenges. I presented a general picture of Bosnia and Herzegovina describing the administrative division of our country and how the legal system, judicial system, regulatory and competition authorities have been established and organised. Furthermore, I introduced fixed telephony operators and fixed telephony service providers discussing the provisions of relevant European Union directives. These one have been partly included in several related legal instruments in Bosnia and Herzegovina, which are deeply focused on the European Union Telecommunications Policy and Legislation with the aspect of the Harmonisation of the Legislation with the European Union directives. Finally, I summarised the legal findings of this thesis, focussing on possible developments in the future, which would allow as better as possible fair competition and better consumer protection.