It'll happen one day, but many carriers have clamped down on spending right now, says LR Insider report

August 12, 2004

3 Min Read
LRI: Eastern Europe Boom on Hold

In Eastern Europe, the telecom boom will not be televised. At least not this year

Yes, the eight Eastern European countries that joined the European Union last May will eventually prosper, but they're off to a miserably slow start, according to the latest Light Reading Insider report (see LR Insider Analyzes Eastern European Telecom Market).

The report, entitled "Telecom Opportunities in the Elite EU8" says accession to the EU will probably accelerate telecom developments in the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia. It also notes that these countries have the right conditions to fuel a boom -- stable democracies, nascent demand for telecom services, and under-developed infrastructures.

Right now, however, incumbent carriers in those countries still call most of the shots, and a lot of them have been forced to significantly cut back on capital expenditure.

To illustrate this point, the report lists selected financial information about the bigger carriers in the region -- the Czech Republic, Hungary, Poland, Slovakia, and Slovenia (see table below). Of the eight surveyed, five had cut capex in 2003, in one case -- Aliatel a.s. -- by a thumping great 75.5 percent. The other Czech Republic carrier listed -- Cesky Telecom a.s. -- cut capex by 38 percent in 2003 and was planning further cuts this year, according to the report.

Table 1: Eastern European Carrier Snapshot 2003


Net Profit/(Loss)


Czech Republic

$976M, up 38%


$8.6M, down 75.5%

Czech Republic

$2.1B, down 3%


$273M, down 38%


$59.6M, up 14.2%

$12.5M, up 54.2%

$205M, flat


$2.9B, up 3.2%

$318M, down 15.4%

$442.3M, down 17.5%


$188.4M, up 14.9%


$39.5M, down 45%


$540.7M, down 5.6%

$114.2M, up 8.1%

$157.6M, flat


$406.3M, down 2.3%

$52.7M, up 53.7%

$51.6M, flat


$5.1B, up 19.6%

$266.M, down 3%

$268.7M, down 3.9%

Source: Light Reading Insider, "Telecom Opportunities in the Elite EU8"

A number of other Eastern European carriers are profiled in the report. These include:

— Peter Heywood, Founding Editor, Light Reading

For more information on "Telecom Opportunities in the Elite EU8," click here.

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