Frost Predicts Mobile Broadband Boom in Central & Eastern Europe

Economic recession and restrictive market regulators policies, especially in terms of mobile termination rate (MTR) cuts, have been the most negative factors affecting the mobile telecommunications market in the Central and Eastern Europe (CEE) region. Mobile telecom operators facing revenue decline from traditional mobile services have started to focus more on mobile broadband development. Although CEE markets differ considerably in terms of mobile broadband penetration, technologies, and network coverage, the common point would be significant market growth expected within the next five years.

Thats the conclusion of new analysis from Frost & Sullivan, Mobile Broadband in Central and Eastern Europe, which notes that the market earned revenues of $1.1 billion (£716 million) in 2009, and forecasts this to reach $5.2 billion in 2014. The service penetration is expected to grow from 2% to 10% within the forecast period. 

“Due to relatively low overall broadband penetration, mobile broadband will be a complementary rather than supplementary service to fixed broadband in CEE countries, says Frost & Sullivan ICT Research Analyst, Edyta Kosowska. “Therefore, mobile broadband operators should initially focus on improving the service quality through sufficient network upgrades, as customers expect the same download speed and data download limits as from fixed broadband Internet. Only when (that has been) achieved, (should) the operators should follow Western European players strategies and concentrate on developing (a) wider range of value-added services (VAS).”

The Frost & Sullivan study assesses the status of mobile broadband in five CEE key markets: the Czech Republic, Hungary, Poland, Russia and Slovakia. The analysis is based on key performance indicators, and looks at the way that different mobile broadband technologies are evolving in those markets. The technologies considered are: code division multiple access (CDMA) revision A and revision B; flash orthogonal frequency-division multiplexing (Flash OFDM); high speed downlink packet access (HSDPA); high speed packet access plus (HSPA+); mobile worldwide interoperability for microwave access (Mobile WiMAX); and long-term evolution (LTE).

“Most of the market participants start mobile broadband service development from large cities centres, where they can count on relatively quick return on investment,” says Kosowska. “This move is still economically justified, as the highest demand comes from people with increased mobility needs, such as company workers and students. However, in the near future, growth potential will be mainly visible within rural areas, where overall broadband penetration remains relatively low. Therefore, focusing on this target group can be a worthwhile consideration.”

To find out more about the study, send an e-mail to joanna.lewandowska@frost.com with your full name, company name, title and contact details.

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