Telecommunications Markets in the 10 new EU Member States

1
Telecommunications Markets in the 10 new EU
Member States

• An overview of recent developments

2
Structure of the telecom market

• Total telecom service markets in the 10 new
  Member States 20 billion EUR
• Poland, Hungary, the Czech Republic and Slovakia
  account for 90 of the market
• Mobile services 48 of total value (38 in
  2001)
• Growth (est.) 9 increase in value at market
  prices in 2004 , against 4.1 in the EU-15 and
  4.5 for the whole EU-25

3
Fixed/mobile substitution

• Mobile expansion 24 density at end-2000 60
  at end-2003
• Stagnation of fixed network despite poor density
  level.

4
Recent expansion of the Internet market

• 4.3 million Internet subscribers at year-end
  2003, 80 of which through dial-up, up from 1.7
  million at year-end 2000.
• Driving factors
• Computer equipment rate
• Regulatory framework
• Development strategy of operators

5
Bridging the gap with Western Europe

• Trends in diffusion of mobile, fixed telephony
  and Internet access

6
Bridging the gap with Western Europe

• Disparities within the 10 new Member States

7
Competition development

• Competition in the mobile market, acting as an
  indirect source of competition in the fixed
  market
• Full liberalization completed on 1 January 2003
• Progress in implementing pro-competitive
  regulations (CPS, interconnection), resulting in
  increased competition mainly in the business
  segment and LD/international traffic
• Strong hold of incumbents on the local loop.

8
FDI positioning of Western European telcos
Incumbent Mobile Others
Deutsche Telekom Matav (HUN) Slovak Telecom (SLO) Westel (HUN) PTC (POL) Eurotel Bratislava (SLO)
France Télécom TP Group (POL) Centertel (POL) Orange Slovensko (SLO)
TeliaSonera Eesti Telekom (EST) Lattelekom (LAT) Lietuvos Telekomas (LIT) EMT (EST) LMT (LAT) UAB Omnitel (LIT) Telia Latvia (LAT) 100
TDC Bite (LIT) Polkomtel (POL) Contactel (CZE) 50
Telekom Austria Si.Mobil (SLI)
Vodafone Vodafone Hungary (HUN) Vodafone Malta (MAL) Polkomtel (POL)
Tele2 Tele2 Eesti (EST) SIA Tele2 (LAT) UAB Tele2 (LIT) Tele2 Eesti (EST) SIA Tele 2 (LAT)
9
Telecom operators

• Growth and restructuring challenges

10
Outlook

• Significant opportunities for growth in the
  medium term impact of general economic
  development, expansion of Internet data market,
  rise in ARPU
• Stronger pressure on tariffs through increased
  competition
• VoIP accelerating the transformation of the
  industry?
• Regulatory challenges adapting to the new EU
  framework