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EuroTel, SlovTel gear up for GSM battle

With 600,000 potential mobile phone customers waiting as the prize, the two companies awarded licenses earlier this year to provide GSM (Groupe Speciale Mobile) services in Slovakia are currently mapping their strategies for what one general manager described as the impending "battle" for market share that will break out early next year.
Although executives from neither EuroTel, a firm owned 51 percent by Slovak Telecommunications and 49 percent by the American consortium Atlantic West, nor SlovTel, a consortium composed of France Telecom and six Slovak firms, would outline how they aim to grab a commanding segment of the market, they did offer a glimpse at the lines along which the territory will be drawn.


Who is going to win his confidence?
Courtesy of EuroTel

With 600,000 potential mobile phone customers waiting as the prize, the two companies awarded licenses earlier this year to provide GSM (Groupe Speciale Mobile) services in Slovakia are currently mapping their strategies for what one general manager described as the impending "battle" for market share that will break out early next year.

Although executives from neither EuroTel, a firm owned 51 percent by Slovak Telecommunications and 49 percent by the American consortium Atlantic West, nor SlovTel, a consortium composed of France Telecom and six Slovak firms, would outline how they aim to grab a commanding segment of the market, they did offer a glimpse at the lines along which the territory will be drawn.

In issuing the licenses, the Ministry of Transportation, Post, and Telecommunications stipulated several conditions that must be met by the providers. One such requirement was that providers start trial service in the capital city before they commence national commercial service next March . While they acknowledged the guidelines, both Artur Bobovnický, the director of EuroTel's mobile phones division, and Bruno Duthoit, SlovTel's general manager, were reluctant to be specific about when they will launch. In SlovTel's case, signs announcing "35 days until trial" posted around the company's temporary offices in the Incheba building on October 18 suggested a starting date of November 22.

More significant than trial service will be the commercial service, which begins in March . Bobovnický would only say that EuroTel intends to offer coverage of virtually all of the Slovak population within two years. Duthoit was more specific, saying that by the end of 1997 SlovTel would cover 91 percent of the population - a level surpassed in very few European countries - and serve 15,000 customers.

Trends in the mobile phone industry show that 11 percent of a country's total population are potential mobile phone users, placing Slovakia's potential market at around 600,000 people.

Duthoit, said his company will invest 6 billion Sk over 10 years, two-thirds of which will be invested by the end of next year, in their effort to grab at least 50 percent of the market share. Bobovnický said his firm also planned on investing 6 billion Sk into the effort.

One investment that neither executive expressed much enthusiasm for was subsidizing the phones and thereby lowering the price to attract more customers. License conditions prohibit subsidizing during the first year, and it currently looks as though neither firm will go that route in the second year. Bobovnický said subsidies may still be a factor in 1998, but only at EuroTel's chagrin. "If we do it, [it will be because] we will be forced to do it." That pressure, however, is not likely to come from the competition, according to Duthoit, who said he was not convinced subsidies provide a good means by which to attract customers.

With coverage and prices likely to be comparable, Bobovnický and Duthoit both emphasized that the battle will be won on marketing, quality and customer service.

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