Next year, telecommunication industry will slow down growth pace

Next year, the telecommunication market will register a slower growth led by economic crisis which will affect the entire IT&C sector.

“The latest projections for growth in the Romanian economy suggest a marked slowdown for next year compared to 2008. This will inevitably affect our continuing growth in line with most other industry sectors. The communication market in Romania will keep on rising, but at a lower pace than in previous years,” said Richard Moat, CEO Orange Romania.

According to him, the communication market is already fragmented as new operators flood in a market with narrow resources. “Considering the difficult times we are experiencing, we will most probably see business consolidations starting next year” said the CEO of Orange Romania.

The operator hopes to compensate the decline of voice services led by the lower tariffs with the massive development of data services.

“We continue to register very pleasing results, but our rate of growth slowed this year because of regulated reductions in mobile termination rates and roaming charges. However, we hope that we can compensate somewhat for this through continuing take up of wireless data services, which can make companies more efficient in these troubled times and create a win - win outcome for ourselves and our customers”, Moat added.

Biggest part of mobile telephony users register medium and small usage, and any growth of economic power reflects in operators’ businesses.

“The growth of mobile voice usage is strictly linked to the country’s economic status, and especially to the clients’ purchase power. In the telecom market in Romania, due to rural/urban structure and to limited incomes of population, there is a major segment of clients with medium and small usage. Once a part of the population reach to more stable pay packages, it will immediately reflect in the minute traffic”, Richard Moat added.

According to him, mobile voice service is the cornerstone of the mobile telephony and the main profit-generator for Orange. “In the context of very low prices for mobile voice services, the growth of incomes based on this type of services is very difficult, and in this phase of development, the mobile data services are the main source of the business growth” said Richard Moat.

Orange operator has approximately 1,146,000 clients on broadband, up 127% from last year’s quarter, and for next year, the operator forecasts similar growth rate.