2007 Eastern European Telecoms Markets and Statistics

A diverse and developing region, the telecom market in Eastern Europe is evolving to meet challenges such as competition in the more liberalised EU markets and offering new services to keep up with demand in developing markets, a trend that will continue during 2008 as economic growth in the region continues. With more than half the region’s countries now part of the EU, it has played a major part in shaping the telecoms market by mandating market liberalisation and promoting fair competition. However the non-EU region as a whole is slowly embracing market liberalisation as part of EU and WTO ascension requirements, presenting new opportunities for end users, alternative operators and investors.

The Eastern European annual reports have been designed to offer 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.

Central Eastern Europe (CEE)

·         Liberalised markets are undergoing consolidation as alternative operators try to build scale to compete more effectively against fixed-line incumbents.

·         Improving regulatory conditions, particularly in the crucial areas of network interconnection and access, are slowly creating competitive telecom markets as envisioned by the EU.

·         The number of unbundled lines in the Czech Republic, Hungary and Slovenia is increasing as a direct result of the aforementioned improving regulatory conditions, with the number of unbundled lines expected to continue rising during 2008.

·         Telecom and broadcasting markets are further converging as more cable and telecom operators launch and expand availability of triple play offerings, which are now available in all five countries.

·         The focus on convergence services is facilitating the deployment of broadband technologies such as ADSL2+ and FttH/FttB.

Baltic

·         Alternative operators continue to steadily chip away at the majority market share held by incumbents in Estonia, Latvia and Lithuania. Alternative operators have had the most success in Estonia.

·         With fixed-line voice markets continuing to shrink, broadband and convergence services is growing in importance. Alternative operators are also making progress in securing access, with the number of unbundled lines slowly rising, a trend which is expected to continue during 2008.

·         The focus on convergence services is facilitating the deployment of broadband technologies such as ADSL2+ and FttH/FttB.

Balkans

·         Alternative operators are making inroads into liberalised markets, although efforts are being hampered by underdeveloped regulatory regimes, particularly in the areas of network interconnection and network access.

·         Both incumbents and alternative operators alike in the region are modernising existing outdated networks and/or deploying new network infrastructure in order to launch broadband and convergence offerings, an ongoing process that will continue during 2008 and beyond.

·         The need to extend telecom network connectivity to rural areas or to rapidly deploy competing network infrastructure is facilitating the use of wireless technologies such as WiMAX, with significant activity taking place in Croatia, Serbia, Kosovo, Macedonia and Montenegro.

·         Increased cross-border merger and acquisition activity is continuing, leading to the emergence of regional non-mobile market players such as Hungary’s Magyar Telekom, Greece’s OTE, Telekom Slovenia and cable operator UPC, a trend that is expected to continue due to liberalised markets.

CIS

·         Considerable network deployment activity is taking place in Russia, as the regional incumbents modernise networks and roll out fibre and ADSL in numerous cities to offer broadband and convergence services.

·         Privatisation of Russia’s state-owned telecoms group Svyazinvest continues to be delayed. Privatisation of Svyazinvest is significant as it holds controlling stakes in all seven ‘mega-regional’ operators that dominate their respective markets.

·         Privatisation of Ukraine’s fixed-line incumbent has also been delayed numerous times.

·         Alternative operators are making inroads into the fixed-line market in Russia and Ukraine. A number of Ukrainian CDMA WLL alternative operators are experiencing strong subscriber growth, a trend likely to continue in 2008 given their aggressive plans to offer national coverage. Alternative operator Golden Telecom is also active in the wireless sector, revealing plans to rollout a mobile network with UMA capability in Kiev.