WORLDWIDE MARKET RESEARCH REPORT - CISE

EC/IST FP6 Project No 026920
Work Package: 6
Type of document: Report
Date: 20.12.2007
File name: OP_WP6_D37_V1.0.doc Version: 1.0
Title: Worldwide Market Research Report 176 / 356
5.3.7 Cost Comparison with traditional Network Technologies
[E21] The ascension of the 10 last EU member states marks a new era in Eastern Europe,
as the countries in the region integrate themselves with their western neighbours.
Requirements to the EU and World Trade Organisation (WTO) have been major influence
behind liberalisation in the region. As a result of liberalisation prices for services have come,
resulting in increased uptake of new services such as broadband. The mobile market in the
region is also facing increased competition as an increasing number of operators have to
find new sources of revenue due to maturing or saturated markets. This too has led to the
introduction and uptake of mobile data and content applications.
Privatisation of the Russia's state-owned telecoms group Svyazinvest is underway as in
September 2005 plans to privatise the telecom operator were submitted to the government
for approval. The privatisation of Svyazinvest is significant as it holds controlling stakes in all
seven “mega-regional” operators that dominate their respective markets but require
upgrades to infrastructure. 2005 was also the year of privatisations for other countries in the
region. In 2005 Bulgaria privatised its remaining 34.6% state-owned stake, Montenegro
privatised its remaining 51.12% majority stake and Albania privatised a 76% majority stake.
Bosnia privatised its incumbent by mid-2006 and Romania completed privatisation of its
remaining 45.99% stake in 2006. Serbia is moving to privatise its 49% stake in its mobile
operator but has been hampered by an ownership dispute.
[E24] While the number of broadband operators is increasing quickly, prices remain high for
a large segment of the market (a factor that is inhibiting it from reaching its full potential). As
a result, operators are coming under increasing pressure to lower prices for access and
increase bandwidth availability.
Other broadband access technologies, such as fixed wireless, satellite, and powerline,
remained negligible (in 2003). For the analysts of the sector, these are mainly niche markets
and should not take significant market share from the more widely available DSL and cable
segments. Still, fixed wireless services remain popular among small and medium-sized
businesses in some CEE countries where DSL or cable are not yet widely available and
where leased lines remain too expensive.