Worth EUR 3.6 billion last year, Romania’s telecom market remains dynamic and competitive. While operators’ financial indicators were hit by the crisis, the firms remain solid and fighting battles on various fronts – network coverage, landline and mobile telephony, fixed and mobile data, analog, digital cable and DTH. BR finds out how the market fared this year.
Fewer users but more traffic characterizes this year’s telecom market. The number of postpay and prepay mobile contracts fell 3.2 percent in the first six months, reaching 23.6 million on June 30. This brought mobile telephony penetration down nearly 3 percentage points, to 110.2 percent, according to data from telecom regulator ANCOM.
“The number of active prepay cards is down 4.5 percent to 14.28 million, while postpay residential customers also declined 2.2 percent to 6.45 million. However, the number of postpay subscriptions signed by companies rose 1.4 percent to 2.86 million,” said ANCOM president Catalin Marinescu.
While the number of users declined, voice traffic continued to grow, reaching 28.6 billion minutes, 7.8 percent up on the last six months of 2010. “Of total voice traffic in the first half of this year, 85.7 percent (the equivalent of 24.5 billion minutes) represented traffic within operators’ own networks. Compared to H2 2010, traffic is up 8.8 percent. Traffic to landline telephony networks and international networks has also risen – by 12.5 percent (to 1.1 billion minutes), and 6.9 percent (272 million minutes), respectively. But voice traffic to other networks declined 1.7 percent (2.7 billion minutes),” said Marinescu.
ANCOM data indicates that most traffic – 55 percent – came from prepay users. “The average duration of a mobile phone call has extended significantly, regardless of the network where the call was finished. It increased to 2 minutes and 23 seconds compared to the level in H2 2010, 2:12,” said Marinescu.
In H1 the average user talked on her mobile for a total of 3 hours and 19 minutes a month, up 9 percent, and sent 36 SMS, a 33.4 percent rise. Mobile phone users sent 5.2 billion SMS during the period, up 31.9 percent on H2, 2010.
“This proves that operators managed to reconfigure their offers and adjust to the new economic climate, which stimulated the growth in traffic, in spite of the decrease in the customer base,” he said.
The data suggests the telecom market has reached maturity, as there is fierce competition among six operators Orange, Vodafone, Cosmote, Telemobil (taken over by Cosmote in 2009), Romtelecom and RCS&RDS. To this roster can be added UPC, a serious competitor, especially for Romtelecom and RCS&RDS, on business lines such as data, landline telephony and television.
One possible merger between sister companies Romtelecom and Cosmote, both part of OTE, is looming, which would make the new entity the largest telecom conglomerate on the Romanian market.
The state, a minor shareholder in Romtelecom with just under 46 percent, announced that it would sell its stake, but OTE, which holds the rest, said it was not ready to make further investments in this economic context. This left the state with the option of listing its shares on the stock exchange, having just finished the process of selecting a consultant to evaluate the benefits of the proposed merger and listing on the stock exchange compared to other options for the operator. RCS&RDS is also said to have begun discussions about the takeover of UPC, though the reports have not been confirmed by either party.
Romtelecom’s revenues dipped 11.8 percent in Q3, 2011, to EUR 160.1 million, while its EBITDA fell 5.6 percent to 36.9 million. Its landline customer base fell to 2.5 million, from 2.6 million at end-September 2010. However, on the data segment the number of subscribers rose 16.8 percent to 1.1 million. TV services clients hiked 20.4 percent to 1.2 million.
Cosmote revenues climbed 2.6 percent in Q3 to EUR 120.6 million, while its EBITDA rose 26.6 percent to EUR 29.5 million. Total customers (including Zapp clients) reached 6.5 million at end-September, of whom 22.8 percent were subscribers.
Orange Romania posted revenues of EUR 241 million in Q3, 2011, 2 percent down on Q3, 2010. On September 30, Orange had 10.18 million customers, including 4.3 million for mobile broadband.
UPC Romania posted revenues of USD 36 million in Q3, 2011. At end-September, it had over 1.5 million customers, and has a database of 266,400 internet subscribers. Telephony subscribers reached 167,200. The company gained on digital cable, reaching 328,600 clients, and on DTH where it reached 255,500.
Vodafone Romania revenues in H1 of the fiscal year until September 30, 2011, were EUR 410.7 million, down 3 percent y-o-y. The customer base fell below 8.6 million from 9.83 million at end-September 2010. The postpay-prepay ratio was 40:60.
Last year RCS&RDS posted a turnover of EUR 418 million (Finance Ministry data).