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. Data in the reports are the latest available at the time of preparation and may not be for the current year.
Central Eastern Europe (CEE)
Liberalised markets are undergoing consolidation, as alternative telecoms operators are not as successful as initially anticipated. The number of significant alternative operators is decreasing and further consolidation is expected in the coming years, with the growing size of the emerging survivors providing scale to more effectively compete against the fixed-line incumbent. Converging telecom and broadcasting markets most evident in the competition between the fixed-line incumbents and cable operators. Cable operators and now fixed-line incumbents have launched triple play services, bringing the two once-distinct groups into direct competition in the Czech Republic,
Poland and Hungary
The effects of unbundling are now being seen, with unbundled lines being taken up by the public, particularly in Hungary, which has experienced the most success out of the five countries with IP bitstream access. Slovenia is also seeing the beginnings of access-based competition, with unbundled, shared access and bitstream access lines numbering in the thousands as at March 2006. We expect unbundling activity to increase during 2007 as most regulators had only completed analysis of wholesale broadband markets in 2006.
Baltic
The incumbents still dominate the liberalised fixed-line market in each country, a situation partly brought about by the regulators which have been slow to complete the prerequisite analysis of 18 communications markets to identify market inefficiencies and recommend Significant Market Power (SMP) obligations. A number of alternative operators do offer services with the region’s well-established cable operators providing the most competition due to the significant reach of their networks. We anticipate the alternative operators will make further market progress in 2007 and beyond as the regulators finish analysing markets, recommend and implement SMP operator obligations.
The primary uncertainty will be how effectively the SMP operators delay implementing their obligations through the courts, as has been the case of all SMP operators in EU telecoms markets. All three fixed-line incumbents share TeliaSonera as either a majority or significant shareholder, with Latvia the only country where it does not hold majority ownership. TeliaSonera attempted to further consolidate its position in the Baltic region by acquiring a significant Baltic IT services operator, a move that was approved in Estonia and Latvia but rejected in Lithuania.
