2008 Eastern European Internet, Broadband and Convergence (tables only)

Eastern Europe’s broadband & Internet market continues to evolve under the weight of competition and technological innovation. Broadband markets are growing based on past investments by operators to expand availability, with much of the broadband market competition still infrastructure based despite implementation of network access regimes. Past growth was mostly due to dial-up users migrating to broadband platforms, hence future growth in most countries will be due to first time subscribers. Service providers are enticing such potential customers by bundling broadband services with telephony or pay TV services with subscribers of such services being a small proportion of total broadband subscribers. The convergence of broadband, telephony and cable TV services is gradually distorting the differences between traditional telcos and cable TV operators while at the same time increasing competition.

Like their Western European counterparts, Eastern European telcos are struggling to arrest the fall in fixed line subscribers, and face the additional challenge of having lower initial fixed line penetration levels and possessing networks that reach a smaller percentage of the entire population. In areas with previously built out POTS/PSTN networks, telcos have predominantly utilised xDSL platforms to deliver broadband and convergence services such as IPTV in the most cost-effective manner. In greenfield areas, telcos have more choice, implementing fibre or wireless platforms depending on various factors. The current global financial turmoil is no doubt forcing many operators to review CAPEX programmes, although BuddeComm believes that long term economic growth prospects and associated unmet demand for communications, education and entertainment services will drive infrastructure deployment into such underserved areas.

Data in this report is the latest available at the time of preparation and may not be for the current year.

The following notes provide some background to our scenario forecasting methodology:

·         This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.

·         The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.

·         All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.