In 2009 telecom operators will try to attract customers from the competition

“2009 will see increased competition among telecom operators, and greater focus on clients’ retention. Second tier operators will try to benefit from market conditions and attract customers from the competition”, said Andrei Ionescu, Enterprise Risk Services Senior Manager at Deloitte Romania, referring to the local market.

Without a doubt, stakes will be high this year, especially since the market has seen new developments in terms of competition, he continued. “Telemobil re-entered the market with a new product last year, Cosmote reported significant growth in number of clients, Romtelecom stopped the decline in terms of fixed line subscribers and is preparing to launch new services - to name just a few,” said the company representatives.

Manager George Onofrei from the Deloitte Romanian’s Management Consulting team, added: “This year, the use of mobile applications and mobile internet/email will grow significantly in parallel with the use of smart phones. The mobile operators will see good opportunities in this area and will come with special offers. Also, several mobile applications will be available on the market at a lower price.”

After reaching 123% by mid-2008, the market penetration rate is expected to see insignificant changes, experts say, naming among factors an already mature market, and the current economic crisis, according to Deloitte representatives.

Top general predictions in telecommunications 2009

• With operators under pressure to cut costs, handset subsidies are likely to come under intense scrutiny, smart phones being a prime target;

• Better customer information may help operators retain their customers and attract those of their competitors;

• Companies might consider the direct financial benefit of less digital communication, since the excessive use of such tools has affected efficiency and productivity;

• Although concerned, operators could actually benefit from the current proliferation of mobile applications sourced from third parties;

• Integration and convergence: Sales of mobile camera phones during 2009 may exceed those of dedicated digital cameras, for the first time ever, since consumer interest in single devices with multiple applications grows;

• The economic downturn is likely to make the mobile phone market turbulent for chip-makers, but the growing range of multi-radio chips may cause demand to grow in other segments, from PCs to hi-fis, clothing to memory sticks.

• With broadband getting more popular globally, operators should take measures so as their networks are able to monetize rapidly growing data volumes;

• Continuous challenges may cast doubt over mobile television this year, with five times more such services expected to close than those newly launched.

• Moving away from infrastructure-based competition: Difficult market conditions might affect investments in multiple fiber networks, which could lead regulators to consider that a single network, with shared ownership and open access, might be the best way forward.

• As the European Commission recommended lower Mobile Termination Rates, some operators could make substantial changes to business models and tariffs, or even revise financial performance targets downwards.

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