|Issue:||Europe I 2008|
|Topic:||Internet access – today and tomorrow|
|Author:||Dan Cristian Georgescu|
|Organisation:||National Regulatory Authority|
Dan Cristian Georgescu is the President of Romania’s National Regulatory Authority for Communications and Information Technology (ANRCTI); he was previously the President of Romania’s Telecommunications Operators’ Association. Mr Georgescu was responsible for the government’s fixed and mobile radio-communications network services and supervised the implementation and maintenance of national radio-communications networks within the Special Telecommunications Service. Mr Georgescu has been a Member of the Board, President of the Board and sole administrator of the National Radiocommunications Company where he initiated and coordinated its privatisation. Mr Georgescu has been a Counsellor to five ministers of communications and contributed to the elaboration of legislation, the process of privatisation and of issuing licences for major national operators. He was also a Member of the Board of the National Company Romanian Post. Dan Cristian Georgescu graduated from the Polytechnic Institute of Bucharest, Faculty of Electronics and Telecommunications, Radio-Technical Section.
Although its broadband Internet access growth rate exceeds 100 per cent, Romania has one of the lowest penetration rates in the EU. Romtelecom, the incumbent operator, will make massive investments in fibre and ADSL rollout over the next two years to speed the growth of broadband access in the country. The Romanian Government’s National Broadband Strategy calls for the development of broadband access for public and private use, especially for education, health, eBusiness, eGovernment, R&D, small businesses and local development.
The annual average growth rates of Internet access services in Romania exceed 100 per cent, although the penetration rate for broadband is at one of the lowest among the European Union’s 27 member states (EU27). Moreover, unlike in most of the EU27, DSL (digital subscriber line) access is of minor importance, mainly due to the relatively late commercial launch of the product by the incumbent Romtelecom. This company has nevertheless publicly announced massive investments to expand its ADSL services over the next two years, and preliminary information indicates a rapid growth of the ADSL connections. In Romania, broadband includes Internet access connections equal to or faster than 128kbps, while in most European countries 128kbps is defined as narrowband. By the end of 2006, there were nearly 1.5 million Internet connections in Romania, of which 76 per cent were broadband connections. Broadband forecast The demand for broadband Internet access services will trigger the growth of access penetration and will drive investment in fixed-line communications networks. We expect the broadband sector to grow significantly in the next few years as new infrastructure with greater coverage and bandwidth becomes available. Competition for customers will encourage lower prices, higher quality, more diversified services and additional value-added services. Broadband, the ultimate platform for applications, drives innovation in the telecom sector, including for voice and video. Romtelecom, the incumbent, is deploying fibre as part of its Next-Generation Network, NGN, plans to have a single platform that will provide all of its services. Other players in the country are deploying fibre to the home. In addition, WiMAX may become an alternative platform mainly in rural areas. Given an increase in broadband penetration, VoIP technology is expected to grow significantly and increase the convergence between data and telephony services. Both residential and business users are purchasing broadband services as a part of a bundle and are demanding higher Internet connection speeds. As the market develops, we expect prices to go down to attract users, build market share and fuel growth. We expect consolidation in the market, as economies of scale are crucial for broadband services. As far as the regulatory developments are concerned, unbundling is not creating a significant impact due to uncertainty regarding NGN and a problematic payback horizon. In the longer term, if market conditions will allow it, bit stream access may become a viable option to promote competition in the fixed access market. We expect the broadband penetration to increase from more than one million to over 3.5 million lines. At the same time, we forecast that the average bandwidth will grow and by 2010 will exceed 0.5 MB, effective download speed. The dial-up connections are expected to disappear over time and become an insignificant platform in the mid to long term. SWOT – broadband communications market National broadband strategy At the moment, the Ministry of Communications and Information Technology, together with the National Regulatory Authority for Communications and Information Technology in Romania are finalising the National Broadband Strategy, the main objectives of which are as follows: • Develop infrastructure in unserved areas; • Promote growth of service availability and attractiveness; • Connect public institutions; • Increase broadband use for public services; • Connect SMEs (small and medium enterprises) and increase their use of information and communications technologies (ICT); • Increase the availability of services; • Develop content and applications; and, • Educate consumers and include digitally excluded users. Broadband communications will bring a variety of benefits: Education – raise the competitiveness and efficiency of the educational system with new methods for teaching and learning (e-learning); Research and Development – increase the level of innovation, the number of solutions and products as a result of the free circulation of information; Economy – develop e-business practices and electronic commerce that bring with them the advantages of significantly reducing transaction costs and intensifying the speed of interaction between companies; Public administration – raise the efficiency and flexibility of the public administration and improve the availability of, and access to, governmental services; Private companies – create new business opportunities, diminish the importance of geographic location and render local companies international; Communities – the development of broadband services fosters economic and social inclusion by facilitating access to new goods and services and provides opportunities to take part in the information society; and, Citizens – ensure access to public services such as e-Education, e-Health, tele-working, increased access to interactive content and the like. Broadband – Europe versus Romania There has been a substantial increase in broadband take up in the European Union. There were almost 73 million fixed broadband access lines in October 2006, compared to 52.6 million in October 2005 – an increase of more than 20 million lines. On average, more than 55,000 broadband lines were added each day during 2006 compared to almost 52,500 lines per day during the previous year. As a result, the average broadband penetration rate in the EU has risen from 11.4 per cent in October 2005 to 15.7 per cent in October 2006. Denmark, at 30.3 per cent, has the highest broadband penetration rate and Turkey, at three per cent, the lowest. The average broadband penetration rate in the EU is 15.7 per cent. Romania’s penetration is increasing rapidly; by the end of June 2007 it had reached 10.8 per cent.