VOIP services

VOIP Finds Home in Eastern Europe

VOIP is now a mainstream telecom service in Central and Eastern Europe following a raft of deployments by service providers in the region, with IP telephony system vendors Cirpack and NetCentrex SA the main beneficiaries.

Softswitch maker Cirpack, now part of Thomson S.A. (NYSE: TMS; Euronext Paris: 18453), has just announced two new deployments, in Croatia and Slovenia, to add to the tranche of Eastern European customers it revealed last November. Its VOIP systems are being used for a range of services, including residential voice over broadband and IP Centrex for business users. (See SiOL.net Uses Cirpack for VOIP, Cirpack Wins in Croatia, Cirpack Touts Deals, and Thomson Buys Cirpack.)

Cirpack rival NetCentrex has also made significant inroads in the region, having signed up 10 new customers and six partners during the past year, including two new customers in Slovenia. (See NetCentrex Touts Euro Uptake, NetCentrex Wins in Slovenia, and Voljatel Uses NetCentrex.)

Other VOIP system vendors have also registered success there, including Italtel SpA in Poland, Verso Technologies Inc. (Nasdaq: VRSO) in Slovenia, and Sonus Networks Inc. (Nasdaq: SONS) with T-Systems International GmbH and Interoute Communications Ltd. (See Italtel Shows Off, TP Picks Italtel, Cisco for VOIP, Slovenians Use Verso for VOIP, Sonus Lands T-Systems Deal, and Interoute Expands With Sonus.)

The uptick comes as the region's telecom infrastructure undergoes a massive transformation, with service providers, keen to take advantage of the region's growing wealth, making the leap from ageing TDM infrastructure to the latest IP-based systems, a trend that was predicted in a Light Reading Insider report in August 2004. (See LR Insider Analyzes Eastern European Telecom Market.)

That transformation, coupled with increasing levels of disposable income, is resulting in growing demand for broadband services in particular. And while the region currently has only about 3.8 million broadband subscribers, according to the latest statistics from Point Topic Ltd. , it is one of the world's fastest growing regions in terms of new subscriber uptake.

According to the research firm, the Czech Republic , Bulgaria, and Slovakia are showing particularly strong growth, while most countries grew faster than the world average. Earlier this month Czech incumbent Cesky Telecom a.s. said its DSL customer base had grown by 175 percent in 2005 to 275,000 subscribers. (See Cesky Updates on Broadband.)

All of which is leading to an explosion in VOIP traffic volumes, with IDC predicting that the number of VOIP minutes in the region in 2005 will be five times greater than in 2004, and will triple in 2006 on a year-on-year basis. The research firm believes the greatest initial uptake is coming from business users that see VOIP as a way to cut their voice bills. (See IDC Reports on Euro VOIP.)

The increasing demand for broadband and VOIP is set to continue as the European Union's new members -- Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia -- develop their economies, and neighbors such as Bulgaria and Romania ramp up their telecom capabilities ahead of their expected acceptance into the EU in 2007. Others hoping to join the EU, and so transforming their IT economies, include Albania, Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia, and Serbia and Montenegro.

Details of the Eastern European deployments comes as Western European carriers find themselves resigned to the impact of widespread VOIP usage, with Orange (NYSE: FTE) citing greater-than-expected VOIP uptake as a major factor affecting its revenue outlook, and Dutch incumbent KPN Telecom NV (NYSE: KPN) announcing the nationwide launch today of its own IP telephony service, InternetPlusBellen. (See France Telecom Gives CFO Le Boot and KPN Goes National With VOIP.)

— Ray Le Maistre, International News Editor, Light Reading

wrobeljas 12/5/2012 | 4:07:35 AM
re: VOIP Finds Home in Eastern Europe What you write here is not accurate, since you try to apply the american perspective to markets operating on totally different rules. I live in Poland, and this is how it really looks:

Major telephony Incumbent is really an incumbent in here (TP - owned by France Telecom) - owning more than 95 of customers. Local loop is not unbundled - competitive local carriers have to build alternative access infrastructure.

DSL from the Incumbent is bundled with the PSTN subscription. You have to pay at least $20 fee for PSTN to be able to buy DSL. And over that line you can order VoIP, but why, since you have to buy PSTN already ?

Cable providers are real competition to the incumbent in terms of Internet access. And they just start to offer very attractive VoIP services, in order to be able to completely replace the offer of TP (incumbent).

TP recently introduced VoIP services, which made everyone laugh:
- you must have DSL from TP
- that means you have to buy PSTN services from TP (and only the ones more expensive than $20 a month can be bundled with DSL)
- you pay $3 monthly fee for the VoIP-capable router-terminal
- service is priced almost in line with PSTN (they are scared of loosing PSTN revenues)

There is a joke running in the industry in Poland: people are betting if more tnan five people in the country will buy VoIP from TP.

Next very popular type of operator are small local networks, buying one fat pipe and providing service over the network. They do not provide VoIP themselves, but their customers are using SKYPE and other simmilar services.

So incumbent operator, quoted in the news, is rather behind everybody else. TP is forced, not willing, to offer VoIP. And is doing everything it can to make it less attractive.
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