Fixed-line telecomms markets face shrinkage in Central and Eastern Europe, says IDC

Telecomworldwire, June 8, 2006

TELECOMWORLDWIRE-8 June 2006-Fixed-line telecomms markets face shrinkage in Central and Eastern Europe, says IDC(C)1994-2006 M2 COMMUNICATIONS LTD http://www.m2.com

Lower prices have not stopped the decline of Central and Eastern European fixed-line telephony markets, according to a new study by market intelligence and advisory firm IDC.

According to the study, in eight CEE countries (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia) the total number of fixed lines is expected to decrease at an annual average rate of 1.2% from 22.7m to 21.4m over the next five years, while revenue will decrease at an annual average rate of 4.2% from USD6.12bn to USD4.97bn.

The decrease of the market for fixed-line services is irreversible and requires operators to develop alternative business models to maintain revenue streams, said a senior analyst at IDC CEMA, adding that in spite of the slowdown in mobile penetration, mobile substitution will continue to draw users from fixed lines. Traffic over traditional fixed lines will also diminish due to increasing popularity of VoIP services in the second half of the forecast period. The report shows that in general, telephony markets in Estonia, the Czech Republic, Slovakia, and Hungary are contracting the fastest. In 2006, fixed-line revenue will decrease by nearly 9% in Hungary and the Czech Republic, by over 7% in Estonia and by nearly 7% in Slovakia. At the same time, PSTN traffic, including voice and dial-up, will decrease by 15.6% in Slovakia and 14.5% in the Czech Republic.

((Comments on this story may be sent to tww.feedback@m2.com))