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Nextra makes net cheaper

Internet connection rates in Slovakia are among the lowest in Europe. Even compared to other former communist bloc countries like the Czech Republic, Poland and Hungary, the percentage of Slovaks using the Internet is minute - a survey done in September, 1998 by the Focus polling agency found that less than 10% of Slovaks use the net even occasionally (see also chart, page BF I).
Information technology (IT) insiders say the Internet has not caught on in Slovakia because Slovaks are still widely ignorant of what the Internet is, while those who do know generally can't afford the connection fees or the hardware needed to use the service.

Internet connection rates in Slovakia are among the lowest in Europe. Even compared to other former communist bloc countries like the Czech Republic, Poland and Hungary, the percentage of Slovaks using the Internet is minute - a survey done in September, 1998 by the Focus polling agency found that less than 10% of Slovaks use the net even occasionally (see also chart, page BF I).

Information technology (IT) insiders say the Internet has not caught on in Slovakia because Slovaks are still widely ignorant of what the Internet is, while those who do know generally can't afford the connection fees or the hardware needed to use the service.

Executives at the Norwegian Internet provider Telenor Internet say they believe that cost is the key to increasing Internet use in Slovakia. Having recently launched an Internet connection package called Nextra, Telenor is betting that low monthy fees and no start-up costs will turn the heads of potential Slovak Internet customers.

Business analysts expect that Telenor will be proven right. "Projects like Nextra are good and useful for Internet users in Slovakia," said Ivan Chodák, an equity analyst at CA IB Securities in Bratislava. "With these kinds of programmes, prices will go down, and more Slovaks will use the Internet."

According to Dag Storrosten, Telenor Internet's Managing Director, the low rate of Internet awareness and use in Slovakia forced his firm to create a special tailor-made package for the country's price-sensitive citizenry. "It's different in Slovakia than it is in Switzerland," he said. "There, Nextra is aimed at business people. But here we have to aim at the regular person, to present the Internet, show them how to get connected, and try to kick-start the market."

The Nextra package includes a CD and a manual explaining how to get on-line. The package comes free of charge, Storrosten said, when buyers sign up for one of three connection plans. The first plan costs 99 Slovak crowns ($2.50) per month for Internet use between 19:00 and 7:00. The second offers unlimited access for 299 crowns ($7.50) while the third plan, aimed at businesses, costs 499 crowns and provides added bonuses such as extra mail boxes.

Why Internet use is low

IT insiders offer different reasons for Slovakia's low rates of Internet use. According to Beáta Brestenská, director of the education programme at Internet promoter Project Infovek (see story page BF I), many Slovaks suffer from a "pyschological barrier" which keeps them from using the Internet.

"People are still afraid of the Internet," she said. "There have been articles written about its negative sides, like pornography and hackers, and this has helped create a psychological barrier."

Storrosten said he felt that the connection rates charged by state-run telecom monopoly Slovenské Telekomunikácie (ST) were too high for the average Slovak, and were depressing the Internet market. "ST [prices] keep Internet use in Slovakia down because Slovakia is a very price-sensitive country," he said. "Rates are higher here than in western countries with established Internet markets."

But ST Product and Services Manager Pavol Bojňanský disagreed. According to Bojňanský, ST offers the lowest connection rates in all of central and eastern Europe. "That [Storrosten's statement] is really unfair," he complained. "Everyone is against ST."

Bojňanský said that ST had lowered their rates as of September 1. ST's old rates, he said, were 2.1 crowns per 2 minute impulse during peak hours (8:00 to 19:00) with the impulse lasting 4 minute during non-peak hours - meaning that one hour on-line cost 63 crowns ($1.50) during peak hours and 32 crowns at non-peak hours.

The new rates increased the impulse rate to 2.5 crowns, but also increased the duration of an impulse. Under the new pricing structure, peak hour impulses last two and a half minutes, non-peak hour impulses 5 minutes, and night time and weekend impulses 8 minutes. Savings during peak hours are minute - an hour is 62.5 crowns - but on the weekend they are significant, with an hour on-line costing less than 20 crowns ($.50).

Given the new rates, Bojňanský said he hoped Internet providers would stop their attacks on ST. "Internet providers in Slovakia think that ST will bear the costs while they bear the profits," he said.

CA IB Securities' Chodák was also hesitant to place the low usage squarely on ST's shoulders. Rates are high for Slovaks, he agreed, but this said more about Slovakia's low GDP per capita than ST's exorbitant rates.

The results

Regardless of its effect on the profit margins of IT firms, low Internet use in Slovakia spells trouble for the nation's future generations. Project Infovek's Brestenská said that the high-tech world of the third millennium will demand a high-tech workforce with computer-age skills - skills that cannot be taught if people continue to neglect basic IT tools like the Internet.

The effects of Internet ignorance are beginning to be felt more sharply. Internet advertising, for example, is a well-established practice in western countries, but is almost non-existent in Slovakia. One advertiser explained that it would be senseless to advertise via a medium which gets next to zero exposure.

"Very few people advertise on the Internet," said Martin Markovič, media planner for the Istropolitana Darcy advertising agency. "Maybe when the Internet in Slovakia is developed and more people have access it will increase, but for now it is very unusual."

For his part, Storrosten said that the low usage rates must be increased in order to prevent Slovakia from falling further behind its European neighbours.

"You can see how Slovakia compares to other countries [in terms of] how advanced they are in Internet technologies," Storrosten said. "In Norway, Internet has a 50% penetration rate, and that is a fairly significant figure compared to Slovakia. The country has to open its borders to the Internet world."

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