2010 Slovakia - Telecoms, Mobile, Broadband and Forecasts

Slovakia feels the need for broadband speed

Defined as an upper middle-income country by the World Bank, Slovakia until recently enjoyed strong economic growth, in part due to its status as a European Union member. An export-dependent economy, the recent global economic turmoil impacted Slovakia’s exports, which counts Germany, Czech Republic and France as its principal trading partners, as well as softening demand at home due to falling confidence and employment. Slovakia entered its first recession since independence in 1993 although the economy is expected to record real GDP growth of 2.7% for 2010 and 3.6% for 2011.

Despite the difficult conditions Slovakia’s competing telecom operators noted the recent economic turmoil did not impact telecoms and IT services as much as other industries, such as manufacturing and finance, given that telecoms and IT services are productivity enablers. However it has increased the difficulty in securing financial funding for telecoms projects.

Despite market liberalisation telecoms incumbent Slovak Telecom continues to hold a near monopoly of the fixed-line services market. Alternative operators have entered the market although tough competitive pressures have forced a number of mergers and acquisitions, resulting in small number of larger alternative operators. Fixed-line penetration is declining due to fixed mobile substitution.

Broadband represents the majority of Internet connections. Competition is predominantly infrastructure-based, with DSL, cable, FttX and wireless broadband available. Increased Internet usage is supporting Slovakia’s Internet society, which has received substantial EU funding to develop and improve access to e-government services.

Digital terrestrial TV has been launched although digital TV is widely available via cable TV, satellite and broadband TV.

Slovakia’s mobile market is serviced by three mobile network operators. Penetration is at near saturation levels, with multiple SIM card ownership evident. Mobile broadband represents a significant growth opportunity, given the launch of HSDPA networks although one established mobile network operator has embarked on a plan to become an integrated telecoms services provider by deploying FttX networks.

Market highlights:

• Broadband represents the majority of Internet subscriptions. Healthy infrastructure based competition is evident given the reach of cable TV networks and deployment of FttX infrastructure by major players. Slovakia’s dominant cable TV operator has implemented Euro DOCSIS 3.0 technology across most of its network, promising speeds of up to 120Mb/s.
• Building on greater broadband penetration and Internet usage is development of online applications and services that form the Internet society; an e-government development strategy until 2013 has been approved and a project is underway to define an integrated IT architecture for the public administration to support delivery of e-government services. Slovakian e-health developments are guided by a government approved e-health national strategy for 2009-2013.
• Digital Terrestrial TV has finally launched commercially, with availability extending to most of the population. Mobile broadcasting trials based on DVB-H technology have been approved.
• Strong growth rates recorded by Slovakia’s relatively new mobile network operator stands in contrast to the steady or declining results of established operators, with one expanding its focus to become an integrated telecoms service provider. Mobile broadband presents a new revenue growth opportunity for all three mobile networks, given existing low mobile broadband penetration. Competitively-priced mobile broadband access services have been launched, bundling generous prepaid amounts of data.

Slovakia broadband and telecoms statistics – 2010

(Source: BuddeComm based on industry data)

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