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Frost & Sullivan

Broadband Begins to Take Hold in Central and Eastern Europe

in Broadband Updates/Broadband's Impact/International/Wireless by

LONDON, April 20, 2010 – Broadband is making strong inroads in Central and Eastern Europe, thanks to government and other incentives for providers to offer service in these previously bypassed areas.

Two recent reports from consultancies Arthur D. Little and Frost & Sullivan offer differing perspectives on Central and Eastern Europe. However, they agree that broadband services will depend much more heavily on mobile networks there than in either Western Europe or North America.

Telecommunications firms across Central and Eastern Europe are taking a bold approach to broadband deployment and the business models that support it, according to Arthur D. Little’s report, “Space for Creativity: Innovative Solutions in Central and Eastern European Telecommunications.” Mobile communications are becoming dominant and favored over fixed line networks for broadband deployment. The mobile solution provides a quicker and less expensive way of rolling out services than digging to install fiber. However, fiber is being deployed in some cities, although not often to the home, in some cases to backhaul mobile base stations.

Frost & Sullivan also notes the ascendancy of mobile communications for broadband in Central and Eastern Europe in its report “Mobile Broadband in Central and Eastern Europe,” but places greater emphasis on negative factors imposed by the economic recession. A lack of money for investment and restrictive regulatory practices can hamper competition.

However, the effect of those challenges largely will be to hold back penetration of fixed broadband so that mobile broadband will not just be considered an added value but an essential service, according to Frost & Sullivan ICT Research Analyst Edyta Kosowska.

“Mobile broadband operators should initially focus on improving the service quality through sufficient network upgrades as customers expect the same download speed and data download limits as from fixed broadband internet,” Kosowska said, adding that only then should operators follow the West European approach of developing value-added services of mobile broadband, such as advanced navigation and location-based applications.

Meanwhile, telecom firms in Central and Eastern Europe are exploiting their emerging IPTV services to gain customers from incumbent cable operators who currently dominate the triple play – or phone, Internet and cable – markets there, according to the Arthur D. Little report.

Telecom firms have cornered the market in rural areas. This, combined with financial incentives from the European Union in the case of EU member countries, is encouraging them to accelerate deployment of broadband in sparsely populated areas. In EU countries such as Poland and Hungary, operators can benefit from the “digital exclusion” policy, providing subsidies for rural deployment of broadband from a pot of money worth about $1.4 billion as part of the European Agricultural Fund for Rural Development.

This type of incentive could prompt operators to focus on rural areas, where overall broadband penetration remains relatively low, according to Kosowska. “First of all, companies implementing this strategy can count on market regulators’ favor, as it links directly with the ‘preventing digital exclusion’ policy. Additionally, part of the investment might be financed by EU funds,” she said.

When it comes to mobile broadband, Central and Eastern Europe could benefit from their position as relative newcomers to the broadband market.

Research: Government Support Will Result In Broadband Public Safety Applications

in Broadband's Impact/Wireless by

WASHINGTON, December 29, 2009 – Government support of wireless technologies is going to result in wireless broadband providers getting more involved in coming up with public safety applications, according to analysis released Tuesday from Frost & Sullivan.

“Governments worldwide have clearly understood the role of advanced communication technologies after numerous unforeseen terrorist attacks and unanticipated natural disasters over the last decade revealed the loopholes in emergency communications. Consequently, many governments have eased their regulatory environments by lowering the barriers to entry for foreign companies and releasing dedicated spectrum for public safety,” found the researchers.

The report finds emerging wireless technologies such as WiMAX and LTE offer significant potential in the public safety communications realm. “IP-based communications is one of the most significant drivers of wireless broadband for public safety communications, as it solves one of the fundamental challenges faced in this segment – interoperability,” said Technical Insights Research Analyst Anirudh Srinivasan in a statement.

“Besides its ability to connect disparate radio systems and frequency bands, the IP platform also enables future technologies to be incorporated as and when required, without getting stuck with a single vendor or protocol.”

As countries clear their expect analogue television spectrum for mobile broadband use, “part of this spectrum is likely to be used for public safety communications in many of these countries on the same lines as in the United States,” according to the research.

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