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TELECOM - COMPETITION SHOULD LEAD TO LOWER PHONE BILLS AND MORE SOPHISTICATED SERVICES

And they're off!

THE FIXED-line phone market is starting to get lively in Slovakia. Customers should soon be able to take advantage of better offers due to increased competition.

THE FIXED-line phone market is starting to get lively in Slovakia. Customers should soon be able to take advantage of better offers due to increased competition.

Seven additional fixed-line operators have signed agreements on interconnecting their networks with the former fixed-line monopoly, Slovak Telecom. They are Amtel, Etel, Dial Telecom, Globaltel, Slovanet, Nextra, and Železničné telekomunikácie, the railway telecommunications operator.

Some of these telecommunications operators have already started providing services on the fixed-line market; some of them are planning to do so in the near future.

Alternative fixed-line operators have been trying to break into the market for several years to become equal competitors to Slovak Telecom. Although legislation for liberalizing the market was adopted several years ago, it is only now that actual liberalization is taking place.

The reason for the delay is that the alternative providers found the first interconnection contracts proposed by Slovak Telecom to be highly disadvantageous and discriminatory. After Slovak Telecom reworked its proposals, some alternative operators have agreed to sign contracts.

The alternative operators say the terms of the agreements are a bit better now but still not ideal. Even so, they decided to sign in order to stay in business. The alternative operators hope the liberalized market will push Slovak Telecom to further improve the contracts at a later date.

Karin Kurpielová, marketing manager of Dial Telecom, told The Slovak Spectator: "In order to ensure a high quality business telecommunications environment, first it was necessary to liberalize the market and then to interconnect with the dominant operator, which is Slovak Telecom. In order to be able to provide complex services in telecommunications for both business and residential clientele, it was a must to interconnect. There was not much choice. You either want to do business or not."

She added that the terms of the first proposal were disadvantageous; the second was partially changed and Dial accepted it. "At present the terms are more acceptable but I cannot say they are ideal," Kurpielová said.

Dial Telecom started providing special voice services at the beginning of 2005, despite the fact that, at that time, they had not signed the interconnection contract with Slovak Telecom. After signing the contract at the end of March, David Bečvář, head of Dial Slovensko, said he expected prices would go down by 20 to 30 percent as a result of competition.

Konštantín Schmidt, product manager of Nextra, said that the terms proposed to Nextra in the last version of the contract were partially amended following scrutiny by the Telecommunications Office (TÚ).

"The TÚ comments stemmed from objections by the Association of Alternative Operators. Now the terms are not only better but also many previous discrepancies and illogical points have been removed. Several operators signed the contract and we suppose that further amendments will follow," Schmidt explained.

According to Schmidt, Nextra will start offering services after the interconnection is completed, which will take two or three months at the earliest. The more pessimistic view is that it will take a year.

Petra Vagaská, PR manager from Slovanet, pointed out: "Signing an interconnection agreement is a must for each entity that wants to become an alternative operator. Slovanet has been preparing for access onto the telecommunications market for a long time. It is interested in providing phone services to households and corporations. Slovanet started to negotiate with Slovak Telecom on the interconnection contract in December 2003. Last year it invested several tens of millions of crowns in building technical capacities."

Vagaská did not specify when Slovanet would start providing services. However she said the company envisages interconnection being accomplished in August or September 2005. Currently, the company is establishing its lines and interconnecting the networks as well as preparing customer products.

Marek Brna, manager of strategic marketing at Železničné telekomunikácie (ŽT), says that the amendments proposed by the Telecommunications Office were a decisive factor in reaching a satisfactory proposal.

Brna said: "Naturally, Slovak Telecom was not glad to retreat from its position. However, ŽT, as a member of the Association of Alternative Operators, perceived this only from a distance because other members were more active on this issue. The decisive conditions for ŽT were amendments proposed by the Telecommunications Office."

According to Brna, after the interconnection of the networks, ŽT will try to provide services to customers across the whole of ŽT's network. Brna did not specify when it could happen and added that it also depended on the promptness of Slovak Telecom.

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