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November 6, 2006
Mobile operators in central and eastern Europe are increasingly aiming their high-speed, broadband data networks at the fixed-Internet market to generate subscription growth while increasing both data usage and data revenues.
Speaking at the 3GSM Central&Eastern Europe event in Bucharest last week, most mobile network operators agreed that limited fixed-line provision meant that the high-speed-data market held lots of opportunities for mobile operators.
Mladen Pejkovic, CTO of Vipnet, said Croatia had only 35 per cent internet penetration at end-June, compared with 90 per cent mobile penetration.
Vipnet also owns a fixed-access license, and Pejkovic said the operator is bypassing the last mile using GSM/UMTS wireless local loop to offer fixed voice and Internet services. “Every customer gets a home zone,” he said. “Sales have been 10 times better than we originally forecast.”
Pejkovic said the service is also driving fixed-mobile substitution, with traffic rising 50per cent in year-on-year growth comparisons. “This is providing a challenge for our engineers,” he said. “We couldn’t do this without the extra spectrum from UMTS.”
Vipnet intends to upgrade the residential service with HSDPA to provide broadband Internet speeds but says demand for bandwidth for corporate products and services is too much for UMTS/HSDPA. “That’s where WiMAX is better,” he said.
Richard Moat, CEO of Orange Romania, also said that there was strong demand for high-speed data services and that fixed-mobile substitution was playing an important role in a region in which fixed networks reach a small percentage of the population.
He said that Orange Romania plans to launch HSDPA services next year but that it is already trialing UMTS TDD as an alternative to FDD for semifixed broadband access. “We are also trialing WiMAX in six cities,” he said.
Orange is not new to UMTS TDD, announcing in March 2005 technical and marketing trials of the technology targeting the enterprise market in Lille, France. The group also tested the technology in Slovakia.
Ken Campbell, CMO of Vodafone Romania, said HSDPA – launched in May – delivers speeds comparable with fixed access. “We are already testing HSUPA at 3.6Mbps,” he said.
Vodafone is offering 3G services in 22 cities throughout Romania and had 230,000 3G subs at end-September. Campbell said, however, that handset affordability remains one of the biggest barriers to consumer take-up. “Seventy percent of [handset] sales are less then Eur70 [$89],” he said. “For us, the challenge is to encourage manufacturers to reduce the costs of 3G handsets. We need sub-Eur100 3G handsets to increase take-up.”
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