27 Apr 2010Romania Broadband Overview

After the state initiated the liberalisation of the telecommunications sector in early 2003 Romania has become one of the most dynamic and competitive telecom markets in Eastern Europe. In the first half of 2009, 16 new agreements of access to the local loop were concluded between the incumbent and the alternative providers. As of end of June 2009, 47 alternative fixed telephony providers were operating in the country. In the same period, the alternative providers controlled a 41.5 per cent share of the fixed public telephone network including VoIP managed access lines. The incumbent has been losing ground as its market share fell by over 10 per cent since June 2008.

In retail market, during H1 2009 the growth of fixed telephony continued upward in several segments. The total number of fixed lines registered a slight growth from 5.17 million at the end of December 2008 to 5.19 million at the end of June 2009, while the total number of subscribers fell from 4.12 million as of 31 December 2008 to 4.07 million as of 30 June 2009. The fixed telephony penetration rate reached a historic maximum of 24.1 per cent (3 percentage points higher than the same period in 2008) at the population level and 53.7 per cent at the household level (2.2 percentage points higher than the same period in 2008).

Romtelecom is the incumbent and national fixed line operator set up as an independent state-owned telecommunications and postal service provider in 1991. Today the Greek national telecoms company OTE owns 54.01 per cent of Romtelecom which it acquired in two stages. Firstly in 1998 and secondly following the introduction of the new regulatory regime in early 2003. The Romanian state controls the remaining 44.99 per cent. Romtelecom entered the Internet market in 2005, launching two broadband products – ‘ADSL express’ and ‘ClickNet Express’. Today it dominates the DSL market with services offering speeds up to 20 Mbps.

With one of the highest penetration rates in Europe, the Romanian mobile market has reached maturity. In H1 2009, the mobile subscriber base stood at 28.8 million, up by 9 per cent since H108, and the penetration rate was 133.9 per cent, up from 123 per cent a year ago. At the end of Q209, the number of active mobile broadband connections grew by 59 per cent, reaching 2.42 million in comparison to 1.5 million recorded at end-2008. This figure includes connections using EDGE, CDMA, EV-DO and 3G technologies.

The mobile market in Romania is dominated by Orange Romania and Vodafone Romania. As of December 2009, Vodafone Romania had 9.66 million subscribers, while Orange had 10.7 million as of September 2009. Cosmote Romania was the third largest player of the mobile sector with 6.3 million customers as at end-June 2009). The operator strengthened its position by acquiring Telemobil (Zapp) in June 2009. The move will enable the company to offer new mobile broadband services using Zapp’s 3G licence and strengthen its position in the promising corporate market segment.

Vodafone and Orange were awarded the country’s first pair of 3G licenses in November 2004. Vodafone launched its 3G service in mid-2005 while Orange switched on its own high speed network early in 2006. In October 2006, Romania Cable Systems (RCS&RDS) and Telemobil won the two remaining 3G licenses auctioned by the Romanian state. RCS&RDS’s 3G service was launched commercially in December 2007, more than a year after the contest. By the end of June 2009, RCS&RDS network covered 56.4 per cent of the population but the operator aims to expand it nationwide by the end of the year. Besides it is trying to compete on quality by launching a service with a speed as high as 7.2 Mbps in Bucharest with a promise to extend it to 10 other cities by end-2009. In mid-2009 Telemobil had an upper hand over RCS&RDS in terms of coverage as its network was available to 97.7 per cent of the population.

Albeit already mature, the mobile market added a new player. In September 2008, the regulator granted Romtelecom a mobile licence in the 410-415/420-425 MHz frequency bands. The licence enables Romtelecom to build and operate a broadband network, as well as offer broadband services which the operator launched in April 2009 using CDMA technology. As of June 2009, Romtelecom’s mobile network covered 6.8 per cent of territory and 32.5 per cent of the population.