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Romania - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. According to data published by the National Regulatory Authority for Communications (ANRC), Romania's electronic communications services market generated approximately €2,997 million in 2005, up from €2,423 million in 2004 and €1,965 million in 2003. The ANRC expects that the market will be worth at least €4,000 million in 2006. The Romanian market is dominated by fixed-line incumbent operator, ROM Telecom, which is 54%-owned by Hellenic Telecommunications Organization (OTE) of Greece. An offering of additional shares in the company was anticipated by the end of 2006, but the issue has been deferred indefinitely due to unsatisfactory market conditions, a planned restructuring of ROM Telecom, and an investigation into several senior members of government relating to their conduct in previous and future planned privatisations (not necessarily involving ROM Telecom). With 3.6 million fixed lines in service as of June 2006, ROM Telecom accounted for 85.3% of all fixed lines in Romania. Its principal rivals are two large cable TV operators, UPC Romania (which has recently swallowed up Astral Telecom and Cablevision of Romania as well as a large number of small regional operators) and RCS & RDS. UPC Romania serves approximately 1.3 million customers, including a growing number of telephone customers. RCS & RDS serves 1.7 million customers, including an unknown number of subscribers in Hungary and Slovenia, but is believed to have as many as 600,000 telephone customers in Romania. ROM Telecom suffered severe financial constraints for several years before OTE stepped in and restructured the company. This restructuring included an aggressive revamp of ROM Telecom's mobile communications division, which had not been marketed properly and which actually lost a large number of customers between 2003 and 2005. Revamped as Cosmote Romania, the revitalised business was relaunched at the end of 2005 and had signed up over one million new customers by the end of 2006. This aggressive growth has been achieved at the expense of the more firmly entrenched Vodafone Romania (formerly MobiFon) and Orange Romania. By September 2006, there were approximately 15.718 million cellular and 3G customers in Romania, with Orange Romania accounting for a market-leading 47.7% share of the total. Vodafone Romania was not too far behind, with 45.5% of the market, but the gap between the two leading operators is slowly widening. Cosmote Romania accounted for 4.3% of the total market as of September 2006, leaving the country's fourth operator, Telemobil (trading as Zapp) with just 2.5% of all customers. Crucially, Orange Romania and Vodafone Romania gained 3G licences in 2004 and two more 3G licences were auctioned in 2006. Although possessing superior business and financial credentials, Cosmote Romania's bid failed on technical grounds and the new licences were awarded to the highest bidders: Telemobil/Zapp and RCS & RDS. Cosmote Romania challenged the decision, but its appeal was denied. It may now have to operate as a virtual provider of 3G services by reaching an agreement with one of the four 3G licensees. Alternatively, it may wait and see if either Telemobil or RCS & RDS default on their licences, in which case it would be next in line to receive a licence.
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