2007 Eastern European Broadband and Convergence Markets

Although broadband has been available for sometime in Eastern Europe, the advent of full scale fixed-line competition has boosted subscriber levels as incumbents in liberalised markets execute survival strategies centred on offering broadband and convergence services. The results are now being witnessed as convergence services are rolled out. The need for more broadband speed has driven deployment of new high-speed broadband networks centred on ADSL2+ and FttH while wireless has been utilised to rapidly deploy alternative networks and extend connectivity into remote areas. ADSL2+ and FttH deployments will continue in 2008 as triple play services grow in popularity. Other factors also driving broadband uptake include public and private sector network deployment initiatives and an accommodating regulatory environment designed to encourage last mile access and promote competition. This report offers extensive coverage of the region, highlighting regulatory and market developments, introducing the major players and the services on offer, as well as providing a wealth of insightful statistics and forecasts, no doubt making essential reading for anyone holding an interest in the region’s telecoms sector. Data in the report is the latest available at the time of preparation and may not be for the current year.

Key highlights:

Central Eastern Europe (CEE)

• The reach of ADSL2+ services is extending in the region as the broadband market continues to grow. The need for speed has also driven a number of public and private fibre rollouts which is expected to continue in 2008.
• Scenario-based broadband forecasts for all five CEE nations are provided, providing a guide as to where broadband penetration is headed.
• IPTV services are available in all five countries from either incumbents or alternative operators. Take up rates are improving, a trend that will continue in 2008 and beyond as telecom operators gain experience in packaging and marketing multimedia services.
• The transition to DTTV is progressing as more commercial broadcasts go to air.

Baltic

• Available from each of the region’s three incumbent operators, IPTV take up is improving. However the incumbents face tough battles with the regions’ well-established cable operators.
• Scenario-based broadband forecasts for all three Baltic nations are provided, providing a guide as to where broadband penetration is headed.
• IPTV availability has expanded on the back of widespread ADSL2+ infrastructure, with FttH deployments also underway in all three countries, predominantly in new housing projects and apartments.
• Wireless broadband has become increasingly prominent. Estonia has deployed WiMAX networks to extend broadband connectivity to rural areas while CDMA 1x EV-DO based offerings are widely available in Latvia. WiFi in widely available in each country, with Lithuania’s incumbent in particular making an effort to expand its WiFi network to approximately 20,000 hot spots by 2009. We believe wireless broadband will become increasingly prominent in 2008 due to greater availability and affordability of mobile wireless broadband services, as well as the growing popularity of laptop computers.
• Estonia has had the most success in fostering an Internet economy, developed in recognition of the ability of Information Communications Technologies to improve social wellbeing. E-commerce and e-government services are widely available, allowing the country’s citizens to access services and carry out commercial and government-related activities online. Growing familiarity of such services, coupled with increasing broadband access will encourage usage among new users, generating efficiencies for both the providers and consumers of such services.

Balkans

• Incumbents are driving ADSL take up, particularly in the more liberalised EU countries, as falling fixed-line voice revenue forces telecom operators to search for new revenue opportunities. Cable operators are responding by improving affordability and product value.
• FttH services have been launched in Bulgaria, Croatia and Romania.
• A number of WiMAX networks have been launched, particularly in Bulgaria, Croatia, Serbia and Greece although while a WiFi network with near national coverage has been deployed in Macedonia, connecting all of the country’s schools. Wireless broadband holds much potential in the Balkans given the region’s low fixed-line penetration levels and underdeveloped infrastructure.
• Triple play services have been launched by cable and telecom operators in Bulgaria, Croatia, Cyprus and Greece.

CIS

• Incumbent and alternative operators in Russia and Ukraine are generating increased revenue through mobile and Internet services, with plans to further grow revenue through broadband and IPTV.
• Plans to offer the aforementioned convergence and broadband-based services have driven the need to upgrade infrastructure, with numerous network upgrades and NGN deployments underway.
• Broadband services in Russia are becoming increasingly popular and available due to increased infrastructure investment, with a large portion of the residential market continuing to be served by large informal LANs in Russia and Ukraine. Deployment of faster broadband services such as ADSL2+ and FttH are underway in Russia. ADSL take up in Belarus and Moldova is rapidly growing off an initial small user base.
• Russian WiMAX deployment activity is continuing in 2008. Operators involved in WiMAX developments include Start Telecom, Synterra Telecom, Enforta, MetroMAX and Summa Telecom. Services are also available in Ukraine, where a number of alternative operators are planning network deployments.
• WiFi continues to be popular in Russia despite heavy WiMAX activity; Golden Telecom has deployed a mesh WiFi network in Moscow providing coverage to 800,000 households.
• Triple play services are available from a number of operators in Russia and Moldova, with availability of such services expected to expand during 2008 due to network modernisation activities.