GKIENET conducted its telecommunications sector survey for the eighth time in the third half of 2002. The target group included telecommunications firms, companies providing landline phone, cable TV and internet services.
Actors in the telecommunications sector are not expecting significant price changes. The prices of international calls are the most likely to drop. The number of lines providing broader bandwidth and faster data flow is on the rise. The number of analogue main lines continues to decline, while ISDN connections are gaining popularity. Voice over IP technology is mostly used in international calls. At present, traditional phone and ISDN are the most common types of services used, but VoIP services could gain significant popularity. Price is a key factor in the market of voice and data services alike. The quality of the service is also significant, and marketing is playing an increasing role, as well. Companies in the segment spend over 6 billion forints on network development. The presence of dominant competitors and high costs are major obstacles in network development.
Electronic procurement and sales are not common in the segment of telecommunications service providers.
Internet service providers enable more and more subscribers to access the world wide web. The household market is expanding at a faster pace than the corporate segment. Currently, traditional dial-up is the most common connection type, but it will lose market share over the next twelve months. The survey responses project a two-fold increase in the percentage of xDSL connections within the next year, up from 8% to 16%. Cable internet subscribers will increase at a fast rate, but their market share will not exceed 4% within the next twelve months. The market share of ISDN connections will also be expanding.
Online wholesale will see the most robust growth, but other e-commerce solutions and the market of online advertising will expand dynamically, as well.
Price and quality are the two major competitive factors in the household and corporate segments alike. Internet subscription fees account for 51% of the total revenues of service providers.
Internet service providers do not generally take advantage of electronic sales and procurement. The lack of effective demand and the abundance of competitors are the key factors curbing advances in competitiveness, but government regulation and high operating costs are also significant obstacles.
Currently the number of cable TV subscribers is approximately 1.6 million. Cable TV companies provide starpoint service to as many as 89% of their customers. The number of subscribers is expected to increase further over the next year. Small firms believe that price is the key factor of competitiveness, while large companies think that the quality of service is a more crucial element. Cable TV companies do not generally provide internet service at this point, but this will likely become more common over the next twelve months. Electronic sales and procurement are not prevalent among cable TV companies, and this is a trend that is not likely to change significantly during the period ahead.