The Telecommunications Market in SouthEast Europe

1
The Telecommunications Market in South-East Europe

• Richard Shearer, CEO Vivatel
• Nov 21st 2007

2
Agenda

• What does the SEE market look like?
• What is impacting growth?
• The European digital divide

3
The SEE Telecoms Market
Sources Lehman Bros, Goldman Sachs
Sources Lehman Bros, Goldman Sachs, EIU
Sources Lehman Bros, Goldman Sachs
4
The SEE Telecoms Market

• Very high growth in Mobile
• Prevalence of Mobile usage vs fixed on average
  mobile penetration is 3x fixed. Usage even
  higher.
• Broadband demand yet to emerge
• Substantial competition in Mobile, more limited
  in Fixed segment (PSTN and Broadband)

5
What is impacting growth?

• Fixed
• Seen as a necessity
• Difficult to make sexy!
• Location dependent
• Often dominated by large incumbent providers
• Mobile
• Choice
• Innovation
• Freedom
• Price pressure see as downward, price elasticity
  effects evident with increasing usage and thus
  utility
• Broadband
• Increasing (slowly) perception of value
• Still seen as costly
• Terminal equipment (pc/laptop) costly high
  barrier to entry

6
The SEE Telecoms Market
?
?
Sources Lehman Bros, Goldman Sachs, Ofcom
?
7
The European digital divide
?

• difficult to prove value
• local language content (limited usage of English
  language in SEE economies)
• end user costs/affordability

Sources Lehman Bros, Goldman Sachs, Ofcom
SourcesCIA Factbook, BTC, Ofcom
8
The European digital divide

• To spur demand and drive all of the associated
  economic benefits of a digitally enabled economy
• Information availability and dissemination
• Better comparative price information leading to
  more equitable pricing practices which in turn
  leads to better allocation of scarce resources
• Communication
• More opportunities for commerce

• .policy makers should seek to close the gap by
  examining the opportunity to provide development
  funding to increase penetration and usage
• Subsidized PCs
• Increased public usage through information
  dissemination via internet, public kiosks for
  access, dialogue encouraged between institutions
  and their customers via electronic media
• Subsidized usage for schools and education
  institutions
• Grants for businesses to e-enable their
  engagement with customers and the broader
  European market

9
Thank you