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IT HARDWARE, SOFTWARE - LOWER PRICES IMPROVE INTERNET PENETRATION; COUNTRY LAGS BEHIND CITIES

Year of the Internet

NOT only is price important, but speed and data volumes play a crucial role as well. The number of Slovak Internet users is increasing and the criteria for selecting the right hook-up are changing.

NOT only is price important, but speed and data volumes play a crucial role as well. The number of Slovak Internet users is increasing and the criteria for selecting the right hook-up are changing.

Companies providing Internet access agree that 2005 is the year of the Internet in Slovakia. The World Wide Web is spreading throughout Slovak business and into people's homes. Although the level of Internet penetration in Slovakia is still comparatively low in EU terms, the trend is up.

All types of companies providing Internet access - mobile operators, fixed-line Internet providers and cable Internet providers remarked on the growing Internet trend in Slovakia in 2005.

Petra Vagaská, PR manager for Slovanet, told The Slovak Spectator: "The number of citizens with access to the Internet is growing. Over the last year the increase was significant." But she added: "[The increase] is still slight compared with western countries. According to a survey by the Point Topic agency, Slovakia ranks low in the penetration of high-speed Internet within the European Union."

Milan Hric, of Eurotel's media division, said: "We consider 2005 in general to be the year of the Internet in Slovakia. Interest from different segments of customers in mobile Internet connectivity is increasing."

Peter Tóth, spokesman for the Orange mobile company pointed out that the current trend in Internet penetration is definitely positive.

UPC Slovensko, which provides Internet connection through TV cables, said that when we look at other EU countries we can only conclude that there is still much to do in Slovakia.


Internet in the home


The Internet is becoming more affordable to more households in Slovakia mainly thanks to positive price developments. Prices for an Internet connection have dropped and companies are offering various special offers tailored to the needs of almost every household.

The biggest barrier in Internet penetration remains the price of computers or mobile phones supporting Internet connection technologies. However, the situation is improving in this field as well.

Peter Tóth, spokesman for Orange, told The Slovak Spectator, "The increased interest is through breaking down economic and psychological barriers by offering cheap and quick connections with simple installation. Also, communication and education by operators support the interest."

He added that customers are gradually realizing that the Internet is part of standard household equipment like a phone or TV set, and that the Internet makes life easier from the point of view of access to information, offices, institutions and entertainment.

Hric of EuroTel said: "The speed, accessibility and especially the price has reached a very favourable level for many Slovak citizens, which automatically drives the wave of interest."

Juraj Ďurov, director for strategy and product management for Nextra, thinks that PC skills and PC equipment in households is generally improving. He thinks that people have started to perceive the Internet not only as a source of entertainment but also as a useful tool for arranging their lives.

"They have learned to pay for things through the Internet, shop, send and receive emails and promote the services they provide. All this confirms that it pays to have the Internet," said Ďurov.

UPC Slovensko emphasizes that people have learned the advantages of Internet access as a communication, entertainment and working tool.

"However, the results could be even better if people were more motivated to buy computers. For example, in Hungary, people that buy computers get tax incentives. If we are really serious about spreading the Internet, the politicians should introduce a similar incentive. Price cuts and increasing Internet speed alone will not help to achieve significant penetration," UPC said in a statement.


Is price the crucial factor?


Slovak householders still consider price one of the most important factors when it comes to getting the Internet. After all, Slovaks are close to the bottom of the EU purchasing power league.

However, Internet providers have started to notice that price is not the only important factor. Some companies agree that it is the result of greater competition in the Internet sector. Various companies produce various products and customer packages and as users become more skilled they are willing to pay that little bit extra for a larger volume of downloaded data and higher speed.

"For a long time price was the main criterion when choosing an Internet connection. Currently, the trend is towards the ratio between speed and price," Hric said.

Tóth from Orange added: "Price is, for sure, one of the key factors. The speed of connection is becoming more important too. In the near future, Internet content will also be an important factor for citizens getting access to state administration offices. Customers expect to be able to communicate with offices without lengthy queuing and paper work."

The Spokesman for Slovak Telecom, Radoslav Bielka, also thinks price is not the only important factor supporting Internet penetration in Slovakia.

"We want to point out that the price of computers is a significant factor as well as the absence of high-quality Internet content. The Internet is still perceived as a means of entertainment and not as a source of important information or a tool for contact with the state administration. The speed of downloading data is becoming crucial as well," Bielka said.

Ďurov from Nextra pointed out that households as well as small businesses always try price-advantageous products first. Petra Vagaská of Slovanet said that apart from the price, additional services play an important role as well.


Country behind city


The pace of World Wide Web penetration in Slovak rural areas is slower than in the cities. Low incomes and consequent lack of affordability are the main reasons.

However, there are technological reasons too. Some forms of high-speed Internet connection like ADSL or cable do not exist in some Slovak rural areas.

"There is a certain difference in interest in the Internet between cities and the country. It is determined by demographical limitations in providing ADSL but other factors as well: purchasing power, education etc," Bielka from Slovak Telecom said.

Vagaská from Slovanet sees policy of a monopoly fixed line operator Slovak Telecom in providing ADSL connection as an important factor.

"In some small towns the only possible solution is wireless connection or dial-up. ADSL technology is still only an issue in bigger towns because Slovak Telecom is introducing ADSL connection only in towns where it expects returns of investments. However, Slovanet records an interest in DSL connection from smaller towns and villages as well," Vagaská told the Spectator.

She continued: "This interest is many times connected with a lower price for high-speed Internet access, which is sometimes much lower than dial-up. That is why Slovanet connects smaller cities to the Internet through wireless connection. Nowadays, about 90 cities and villages are connected through microwave technology. The number of connected municipalities doubled and Slovanet expects further growth."

ST defended its position saying that the number of locations covered by ADSL technology in Slovakia now stands at 151 and ST's intention is to spread it to 350 locations until the end of 2005.

Similarly, UPC, the cable Internet provider that provides the high-speed and broadband Internet only in Bratislava, intends to widen its services to include Žilina, Trnava, and Košice.

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