Official publication
Central & Eastern Europe Telecommunications Market Overview
Telco TV, WiMAX, convergence products set to fly in CEE?
IPTV booming across the region
Incumbent carriers across the region are rolling out TV services to compete with those offered by cable MSOs. In one recent development, Slovak Telecom has launched an IPTV product, to be marketed as part of the Magio suite of services, offering customers a triple-play package including multichannel TV, video-ondemand and PVR services.
Mobile TV set to gain traction?
In the mobile space, bringing TV content to the so-called 'third screen' may impact on the 3G network deployment plans of MNOs which have yet to deploy WCDMA. Back in July 2006, Vodafone Czech Republic announced that it would halt the development of its WCDMA network, as it believed it would not generate sufficient ROI. However, it appears that Vodafone has not yet given up on the idea of developing a 3G network in the country, having announced discussions with T-Mobile on network sharing. One possibility for network sharing would be in the field of mobile TV, as according to Vodafone Czech Republic's CEO Grahame Maher, the three Czech operators have a tentative agreement that there will be only one mobile TV network. Earlier this year, Telekom Austria, whose mobile subsidiary has a footprint across south-eastern Europe, started a DVB-H pilot project jointly with another Austrian mobile network operator and a broadcaster.How much room remains for mobile subscriber growth?
Orange Romania is reportedly aiming for revenues above EUR1.1 billion (US$1.48 billion) for 2007, with the intention of increasing its client base to over nine million customers this year. CEO Richard Moat has been quoted as saying. So even as CEE telecoms markets mature towards saturation, growth potential remains. Moat has also said that there has been strong demand for data services and that fixed-mobile substitution was playing an important role in a region in which fixed networks reach a small percentage of the population. He said that as well as launching HSDPA services, the operator is already trialling UMTS TDD as an alternative to FDD for semifixed broadband access. 'We are also trialling WiMAX in six cities,' Moat has said.
CEE: hotbed for WiMAX?
WiMAX is also gaining traction in the region. A number of markets have seen significant activity, notably Croatia, Estonia and Bulgaria, where mobilkom austria subsidiary M-Tel is among a select group of MNOs worldwide to have deployed WiMAX infrastructure. Bulgaria has also seen a number of start-up service providers competing with the wireline incumbent for broadband business via the deployment of WiMAX.
Total mobile subscriptions in central Europe, the Balkans and Baltics are on track to hit 150 million in 2009
Two key factors continue to boost subscription numbers in the region: new market entrants offering lower tariffs and thereby expanding the potential market for mobile and the increasing usage of dual and multiple SIMs.
Total mobile subscriptions in the region increased by 20.4 million (20.2%) in the year to March 2007, reaching 121.4 million according to WCIS. In actual terms, Poland recorded the highest number of net additions over the period (7.1 million) to reach a total of 37.8 million, reinforcing its position as the largest market in the region. By 2011, Poland is expected to reach almost 50 million subscriptions according to WCIS forecasts. Romania, the second largest market, grew by 4.4 million to 18.6 million subscriptions over the period, while Bulgaria and Serbia also recorded net additions above one million.
Seven countries in the region have already exceeded 100% penetration, with Lithuania recording the highest rate (134.8%) as at the end of March 2007. Poland will be the next country to pass the milestone according to WCIS, later in 2007, with Hungary, Slovak Republic and Romania each hitting 100% during 2008.
In these mature markets particularly, growth has been driven by the dual SIM card phenomenon. Customers are taking out additional subscriptions either for both business and personal use or to take advantage of different tariffs and promotions offered by more than one operator.
Consolidation within the region is now largely complete, with few acquisition or licence opportunities remaining. The region’s largest investors include Deutsche Telekom, Vodafone, Telenor, France Telecom and Telekom Austria. An increasing number of operators in the region, particularly the incumbents, are looking to offer converged services, bundling fixed, mobile, broadband and TV services to their customers. The number of broadband subscriptions continues to increase in the region, with Poland the largest market on 2.7 million (up 39.6% year on year), followed by Hungary on 1.4 million (up 71.0%) at the end of March 2007, according to Informa’s Broadband Subscribers Database.
Meanwhile usage of mobile data services continues to account for an increasing proportion of operators’ revenues. According to Informa Telecom’s & Media’s World Cellular Data Metrics (WCDM), non-voice represented 15.3% of revenues in 4Q06 compared to 14.8% in the same period of 2005 and will likely increase further as operators promote more heavily their WCDMA and HSDPA networks. Whilst the proportion is lower than the 22.4% recorded in Asia Pacific and 18.0% in western Europe, it is above other world regions including USA/Canada (14.3%), Middle East (10.4%) the Americas (10.2%) and Africa (5.9%).
As at June 2007, 27 commercial WCDMA networks were in operation in 12 markets in the region. A further eight were expected to launch by year-end and another six are earmarked for 2008. However, the total number of 3G subscriptions remained low at just 1.5 million at the end of March 2007, representing just 1.2% of the region’s overall base. This compares to 11.4% in Western Europe and 4.9% in Asia Pacific.The figure reflects’ operators’ strategy to target the technology to niche users first, particularly the corporate sector. The WCDMA count will continue to increase slowly according to WCIS, reaching 4.7 million by the end of 2007 and 12.2 million at end 2008. Accelerated migration away from GSM will not occur until after 2011, with the 100 million mark likely to be passed in 2012.
Source: Informa Telecoms & Media
