2010 Romania - Telecoms, Mobile, Broadband and Forecasts

Infrastructure-based competition powers on in Romania

One of the European Union’s newest members, Romania experienced rapid economic growth in the years leading to and immediately after EU ascension. Much of this growth was due to foreign direct investment, capital inflows and loose fiscal policies.

Like many of its neighbours, Romania has been impacted by the recent global financial turmoil through declining demand for its exports, a slowdown of credit activity, and lower foreign direct investment inflows. Real GDP contracted by 7.1% during 2009, with EU estimates of 0.8% real GDP growth in 2010, rising to 3.5% for 2011.

Like much of the economy Romania’s telecoms market underwent reform to align telecommunications policy with that of the EU. Competing fixed-line operators have entered the liberalised market, although incumbent operator RomTelecom retains a major share of the overall telecoms market.

Significant competing operators include cable TV operators which possess sizeable access networks, customers and established brands. Ongoing action by an active regulator has improved market conditions although more work is required to improve market competitiveness.

Broadband represents the majority of Internet services in Romania. Healthy infrastructure-based competition is evident although this is more the case in cities and urban areas where investment in competing infrastructure is focused.

An increasing Internet-user base and improving ICT literacy is stimulating usage of online services within the domain of public administration (e-government), commerce (e-commerce), health (e-health) and education (e-education). Offered e-services are increasing in sophistication following increased investment by service providers.

A healthy digital TV market is evident in Romania, with competing digital TV offerings available via broadband TV, cable and satellite. The market is fragmented due to the number of major service providers for each platform, with consolidation likely in the medium to long term. Digital terrestrial TV development is underway but has been marred by set backs.

Romania possesses a well-developed mobile market with mobile ownership levels in excess of 100% although such penetration levels indicate multiple SIM-card ownership. Romania’s mobile market is served by five mobile network operators although the merger between two operators will reduce this number to four. Mobile broadband, made possible following the launch of 3G/HSDA networks, is a key revenue growth opportunity, with all operators offering competing mobile broadband offerings bundled with generous data allowances.

Market highlights:

• Healthy platform based broadband competition is evident, with access widely available via cable, ADSL, FttX, LAN and wireless. Competition has increased offered access speeds to 100Mb/s. Government broadband policy envisions broadband coverage extending to 100% of Romania’s population by 2015.
• Digital TV is widely available via cable, satellite, broadband TV and digital terrestrial TV. The incumbent has launched IPTV services although it operates a very successful satellite pay TV platform. Analogue switch-off has been postponed to 2015 to extend the transition period.
• Competition among Romania’s four competing 3G mobile networks has increased maximum speeds offered to 21Mb/s and improved affordability of mobile broadband services. The future growth path of mobile broadband take up is expected to emulate that of the mobile voice market over the coming years due to the decreasing cost of access and capable handsets and increasing end user awareness and ease of use.

Romania broadband and telecoms statistics – 2010

(Source: BuddeComm based on industry data)

Paul Kwon

November 2010

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