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Globtel first out of the starting blocks in GSM race

Globtel struck first in the battle to win an estimated 600,000 customers who will be using the long-anticipated mobile phone network GSM. Globtel, composed of France Telecom and six Slovak firms, opened its services for commercial use in Slovakia on January 15. The other company operating the GSM network, EuroTel, made up of the American consortium Atlantic West and Slovak Telecommunications, will offer its services for commercial use February 20.
"It was a riot scene at our store," said a giddy Bruno Duthoit, Globtel's general director. In the first week alone, mobs of people lined up in front of Globtel's newly-opened store located in the center of Bratislava. "We offered our services first to give us a jump on our competition," Duthoit said. "People are wrapped up in the marvel of new technology."

Globtel struck first in the battle to win an estimated 600,000 customers who will be using the long-anticipated mobile phone network GSM. Globtel, composed of France Telecom and six Slovak firms, opened its services for commercial use in Slovakia on January 15. The other company operating the GSM network, EuroTel, made up of the American consortium Atlantic West and Slovak Telecommunications, will offer its services for commercial use February 20.

"It was a riot scene at our store," said a giddy Bruno Duthoit, Globtel's general director. In the first week alone, mobs of people lined up in front of Globtel's newly-opened store located in the center of Bratislava. "We offered our services first to give us a jump on our competition," Duthoit said. "People are wrapped up in the marvel of new technology."

EuroTel conceded that Globtel's opening hurts initially. "They probably took some of our customers," said Katarína Grosmannová, EuroTel's public relations director. "But we expect to win them back with our quality."

Besides claims in the difference in quality, the only marked difference between the two network operators is price. Globtel's strategy has been to offer a lower price to attract customers. "The main question for people will be, what is the price?" Duthoit said. "It's not so expensive for families to buy a phone for 9,000 Sk, an 800 Sk start-up fee, and then 420 Sk each month to use the service." EuroTel's prices for start-up and monthly fees will be higher, but the firm has yet to release them. "Our high quality will be factored in the price," Grosmannová said.

However, both companies will have to sell phones at roughly the same cost, due to Slovak regulations that phone prices must reflect their real market value. Compared to the Czech Republic, where phones are subsidized by network companies, the difference in price is large. While phones will cost between 9,000 to 12,000 Sk in Slovakia, the same models cost 4,000 Kč to 6,000 Kč in Prague.

This makes it expensive for customers and challenging for the network operators and phone providers. "It's a different game in Slovakia," said Kamil Tůma, Motorola's sales and marketing manager for the Czech and Slovak Republics. "Because of price, who markets better will determine who succeeds."

Both Globtel and EuroTel offer a wide variety of phones in their stores, including brand names such as Ericsson, Motorola, Nokia, Panasonic and Philips. Features range from luxurious, small lightweight models, to phones with long-lasting battery power, to standard featureless phones at lower prices.

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