This presentation was held in the framework of the
ITU New Initiatives Programme project “The Future of Voice”
26 June 2006, ITU Headquarters, Geneva, Switzerland
VoIP in South and Eastern Europe:
Strategy and Policy Considerations
Anna Riedel
The views expressed in this presentation are those of the author and do not
necessarily reflect the opinions of the ITU. Anna Riedel can be contacted
at Anna.Riedel@itu.int or AnnaRiedel@hotmail.com.
Market Overview SEE
• Between 2003-2005 telco markets grew by ~
11% (EU 15 3.4%)
• Strongest growth seen in Bulgaria (16.4%
p.a.) and Romania (15.9% p.a.)
• Nevertheless total market value remains
behind that in Western Europe
26 June 2006
Anna.Riedel@itu.int
annariedel@hotmail.com
2
Mobile Markets in Eastern Europe
Lithuania
Percent of Population
140%
Czech Republic
120%
Estonia
Montenegro
100%
Russia
80%
Slovenia, Hungary
Croatia, Poland
Slovakia
Latvia, Bulgaria
Macedonia
Ukraine Romania
Turkey
Bosnia Albania, Serbia
60%
40%
Moldavia
Belarus
20%
Market
maturity
Embryonic Early stage Developing
stage
26 June 2006
Source: A. D. Little
Advanced
Anna.Riedel@itu.int
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Mature
3
Romania in 2005
Population:
22,329,977
Telecom service market:
€ 2.71 bn
(23.3% yoy growth)
GDP:
Total: € 77.6 bn
€ 3,589 per capita
(4.1 % yoy growth)
26 June 2006
Anna.Riedel@itu.int
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4
Market data (mobile & fixed)
in %
Fixed and Mobile Penetration rates
Aggregated
revenues of four
main mobile
players up 33% in
2005
70
60
50
40
30
20
10
0
2000
2001
2002
Fixed line penetration rate
26 June 2006
2003
2004
2005
Mobile peenetration rate
Anna.Riedel@itu.int
annariedel@hotmail.com
5
Market data II (Internet)
Internet
100
4000
+ 327%
75
3000
% 50
2000
25
1000
0
0
2000
2001
2002
Internet penetration rate %
2003
2004
2005
number of w eekly internet users (thou)
Source: http://rbd.doingbusiness.ro/
26 June 2006
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6
Market data III (Internet)
Narrow- vs. Broadband
thousands
1500
1000
500
0
2003
30.06.2004
number of narrowband connections
26 June 2006
2004
30.06.2005
Number of broadband subscribers
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Regulatory Overview
• 1st of January 2003 fixed-line telephony market was
liberalized and opened to private competition (all
platforms)
• Has implemented the authorization directive given by
the EU 2003 package
• no legal entry barriers (no charge for entry license,
numbering, etc.)
• 3 GSM providers and one CDMA 2000 operator (450
MHz); two 3G licenses and two more to come
• National Regulatory Authority for Communications
(ANRC) has authorized more than 2,600 companies to
offer electronic communications services in 2005
26 June 2006
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VoIP regulation
Official position on VoIP
Date of liberalization
• the principle of
technological neutrality
• considered
telephony services if
they fall within the
scope of the definition
of the publicly available
telephony services
• ANRC is currently
reviewing its position on
other types of VoIP
services
• Jan. 1, 2003
• Article 2, par (1) (c)
of Law No. 304/2003
on the universal
service and users’
rights relating to
electronic
communications
networks and services
26 June 2006
Anna.Riedel@itu.int
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Licensing
requirements
• General
authorization with
notification
• Max. 0.5% of
annual revenue
9
Recent Developments
1. Atlas Telecom will deliver residential VoIP over a
fixed-wireless network using DECT* cordless
technology
• Is uses the SIP-based BroadWorks VoIP
application platform in tandem with DECT wireless
nodes and cordless phones
• The bases will be posted on lamp posts with 200m
signal each (4thou per city)
2. Combridge SRL launched a new telecom brand:
Eufonika
• It uses the RomTelecom network and customers
have to access a free number in order to get
connected to the VoIP offer
3. Orange launches first 3G offer in Bucharest
* Digital Enhanced Cordless Telecommunications
26 June 2006
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10
Bulgaria in 2005
Population: 7,761,000
Telecom service market:
1.2 bn
(10.9% yoy growth)
GDP:
Total: € 21.4 billion
€ 2,779 per capita
(5.2% yoy growth)
26 June 2006
Anna.Riedel@itu.int
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11
Market Data
ITC Market Overview
per 100 people
80
60
40
20
0
2000
26 June 2006
2001
2002
2003
2004
2005
2006
Telephone main lines
Mobile subscribers
Internet users
Broadband subscriber lines
Anna.Riedel@itu.int
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12
Regulatory Overview
• Has completely privatized the incumbent
operator (except golden share) by June
2004
• BTC still holds 97% market share
• Individual licenses for fixed telephony
needed (network or carrier)
• Communications Regulations Commission
(CRC) has licensed 3 2G and one
analogue (RTC) and 658 local cable
operator
26 June 2006
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13
VoIP regulation
Official position on VoIP
•No official position, if
VoIP services do not meet
the QoS parameters for
fixed voice telephony
service
•they are not allowed to
apply for a voice license
with rights to interconnect
under reference
connection offer (RIO)
26 June 2006
Date of liberalization
Licensing
requirements
•No licensing/
authorization regime
for VoIP as long as
• not regulated
minimum QoS
• (Art. 3, all. 2 of
requirements for
Regulation No. 12 of May voice telephony are
5, 2004 for fixed voice
not met
telephony)
•otherwise a fixed
voice telephony
license is required
Anna.Riedel@itu.int
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14
Recent Developments
1. Bulgarian triple play provider CableTel
agreed to buy majority stake in Evrotur Sat
TV (local key competitor)
2. Internet telephony provider Ekstel received
license to provide street phone services
3. VoIP connecting Bulgarian Sea central
administration of Port Infrastructure State
Enterprise through a VoIP information
technology system
26 June 2006
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15
Croatia in 2005
Population: 4,551,000
Telecom service
€ 1.5 bn
(2004)
GDP:
Total: € 28.07 bn
€ 6,079 per capita
(4.3% yoy growth)
26 June 2006
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16
Market Data
Penetration rates in %
80
70
60
50
1.08
40
30
20
0.41
0.10
0.04
0.69
0.21
10
0
2000
2001
Broadband
subscriber lines
per 100 people
26 June 2006
2002
2003
Fixed line
Anna.Riedel@itu.int
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2004
Mobile
2005
Internet
Source 2005: GI
17
Regulatory Overview
• Liberalized from Jan 2003
• Incumbent is held by Deutsche Telekom
(51%)
• Various cable operators licensed and 3
2G operators (active)
26 June 2006
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18
VoIP regulation
Official position on VoIP
• The right to provide
VoIP telecommunications
services is acquired by a
legal or natural person by
submitting a written
notification to the Agency
26 June 2006
Date of liberalization
• June 30, 1999
Anna.Riedel@itu.int
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Licensing
requirements
• General
authorization with
notification
• € 670 one-off fee
plus 0.1% of annual
revenue
19
Recent Developments
1. Slovenia's national telco Telekom Slovenije
wants to acquire one of the largest Internet
service providers Vodatel while T-Hrvatski
Telekom (incumbent) is in talks on acquiring
Iskon Internet
2. Italy-based systems integrator Essentia will
distribute broadband solutions (G6),
including VoIP in Croatia
3. WiMAX Telecom Group’s bid for Zagreb
region got accepted (will start wireless
broadband incl. VoIP this year)
26 June 2006
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20
Turkey
Population:
70,413,958
Telecom service market:
€ 8.4 bn
(2004)
GDP (2004):
Total: € 242.598 bn
per capita € 3,393
26 June 2006
Anna.Riedel@itu.int
annariedel@hotmail.com
21
Market Data
ICT Market Overview
Penetration
80
60
40
20
0
2000
2001
2002
2003
2004
2005
2006
Telephone main lines (per 100 people)
Mobile subscribers (per 100 people)
Internet users (per 100 people)
Broadband subscriber lines (per 100 people)
Source: ITU/ 2005 EIU est./ 2006 forecast
26 June 2006
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22
Regulatory Overview
• the Ministry of Transportation is
responsible for operational activities of
Turk Telekom (45% state owned)
• Independent NRA: Telecommunications
Authority
• Fixed wholly liberalized in July 2005
• Neither call termination nor call origination
model is used for interconnection agreem.
between ISP and incumbent
26 June 2006
Anna.Riedel@itu.int
annariedel@hotmail.com
23
VoIP regulation
Official position on VoIP
• No specific
position on VoIP
• VoIP requires a
long distance
telephony service
license
26 June 2006
Date of liberalization
• Jan. 1, 2004
Anna.Riedel@itu.int
annariedel@hotmail.com
Licensing
requirements
• Individual
license
•fee: same as
long distance
tel. plus 0.5%
of net annual
sales
24
Recent Developments
1. French B3G Telecom offers white label
Broadband Telephony Services in Turkey
2. Damaka announced operator launch with
Mortel Telecom
3. Teletek Telekom, Turkeys leading IP
carrier, integrates next gen SIP service
architecture
26 June 2006
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25
Obligations
Univ.
USO cost
Services compens.
USO elig.
QoS
for mob. measure
operators
Yes
Yes
Yes
Yes**
Yes
Yes
No
Yes
Yes
Yes*
Yes
Yes**
Yes (No:
NA, DIS)
Yes*
No
Yes**
NA: Network Access DIS: Directory Inquiry Service
* Not in practice ** not yet published
26 June 2006
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26
Considerations
Mobile vs. Fixed
100
Mobile penetration
EU average
in %
80
60
40
20
0
RO
BG
Mobile Jan 2005
26 June 2006
HR
Mobile Nov 2005
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TR
Fixed Nov 2005
27
Considerations
What is the future of voice in SEE?
¾ Difficult to foresee
¾ Depends also on EU accessions
¾ Very tight regulation with VoIP seen as
substitution for fixed => many obligations,
higher market barriers to entry, less
competition
¾ Or: laisser-faire => QoS, interconnection,
USOs, numbering?
¾ Esp. in SEE: low broadband penetration =>
mobile VoIP (3G or WiMAX)
¾ NRAs have to focus on universal access
26 June 2006
Anna.Riedel@itu.int
annariedel@hotmail.com
28
Considerations
1. Universal access approach
2. Regulatory holidays in order to give
incumbent the chance to deploy the
infrastructure, therefore broadband and
possibility for VoIP
26 June 2006
Anna.Riedel@itu.int
annariedel@hotmail.com
29
Thank you very much for your attention.
Contact:
Anna.Riedel@itu.int
AnnaRiedel@hotmail.com
This presentation was held in the framework of the
ITU New Initiatives Programme project
“The Future of Voice”
26 June 2006
Anna.Riedel@itu.int
annariedel@hotmail.com
30