Alternative telecoms providers surveyed

TO REMAIN efficient, to help their clients to be effective and to increase the penetration of broadband internet are the main challenges Slovak alternative telecoms operators face. And even though the global economic downturn is affecting the telecoms segment, alternative operators see flexibility as their main weapon when fighting its impacts.

Young people cannot imagine life without the internet or mobiles.Young people cannot imagine life without the internet or mobiles. (Source: SITA)

TO REMAIN efficient, to help their clients to be effective and to increase the penetration of broadband internet are the main challenges Slovak alternative telecoms operators face. And even though the global economic downturn is affecting the telecoms segment, alternative operators see flexibility as their main weapon when fighting its impacts.

The Slovak Spectator spoke to Stanislav Verešvársky, executive director of Swan; Slavomír Benko, PR manager at Slovanet; Ivan Leščák, director for products and strategies at GTS Slovakia; and Juraj Havrilla, director of Železničné Telekomunikácie Bratislava, for their views as part of the following brief survey.

The Slovak Spectator (TSS): What are the biggest challenges currently facing the Slovak telecommunications sector?
Stanislav Verešvársky (SV): Swan sees the ongoing growth in the sphere of broadband internet services to be the biggest challenge.

According to Slovak Telekom’s estimate, the Slovak telecoms sector grew by 3.7 percent during 2008, while the fastest growth was registered in the segment of mobile services, at 5.3 percent. But the highest growth dynamic has been recorded in internet services. Our experiences prove this: we are registering the biggest upward trend in broadband internet services. This is reflected in the growth of requirements for higher transfer speed in the corporate segment while companies have ever bigger requirements for infrastructure when launching new applications and ever more prefer solutions based on optic networks. Broadband internet and data services in the small and medium-sized enterprises (SME) segment are also increasing, while broadband internet and triple-play services in the residential segment of the market are growing at a high pace too.

Slavomír Benko (SB): The main challenge of each operator, regardless of its size, is to maintain its effectiveness. This means keeping its operating costs growing appropriately relative to the growth of its business.

For Slovanet, the current challenge from the viewpoint of investment is going ahead with the switch to optic technology, which brings clients services of the highest quality and reliability. And a common challenge for all internet providers is to speed up the development of infrastructure and extend the availability of telecoms services in order for Slovakia to catch up with western countries in terms of internet penetration.

Ivan Leščák (IL): In the near future, businesses and users will focus on optimising their costs and making their activities more efficient, and thus the task of telecoms operators is to provide such services as will help them fulfil these aims, i.e. especially to improve communications and save costs within their activities.

Juraj Havrilla (JH): From the point of view of an alternative operator, we can speak about greater availability of broadband internet to the public, and its support also through EU operational programmes. Broadband access is also an inevitable pre-condition for computerisation of the public administration, which will thereby enable the wider public to use its services.

TSS: How might the current global economic crisis influence the telecoms sector in Slovakia?
SV: In the IT and telecoms sectors the crisis has not shown up so markedly as it has in manufacturing and finance, since the services they offer are tools which companies can use to increase their economic effectiveness and productivity. However, the availability of financial resources to finance development of telecoms projects is now very limited, and has directly influenced all development activities.

Another impact of the crisis might be also a bigger reduction of telecoms services’ costs within the total reduction of costs and the potential dampening of activities and production in businesses resulting in their leaving the Slovak market. These risks do directly concern us, as these are our clients.

The impact on the residential segment of the market too is direct and logical, since in some regions purchasing power is declining along with employment.

SB: Telecoms services are one of the main conditions for companies to operate. Thanks to this these services are not reduced and companies are fully aware of the fact that saving on telecoms or security services is not a cure for the crisis. Moreover, for companies which have not used IP telephony so far this solution may be an effective route to cut costs. On the other hand, during a crisis firms ponder more carefully their expenditure on extra services.

The communications and entertainment potential of telecoms services is so strong that households will not limit themselves in their usage even during times of crisis.

IL: Telecoms operators will strive to keep their existing clients by using a supply of services that customers really need to maintain and improve their activities and to reduce the costs of their activities, as telecoms services perceived as luxuries will be limited by both companies and citizens under crisis conditions.

JH: The telecoms sector will probably be involved in the crisis too, which will on the one hand influence the functioning of operators and on the other hand also the behaviour of clients. We can expect operators to come up with new products, and clients to inspect more closely all the parameters of products, but price will still remain the decisive criterion when deciding on a certain product.

TSS: What are the chances of alternative telecoms operators staying competitive?
SV: Competitiveness is a crucial issue for an alternative operator. It means being able to provide services more flexibly, more directly to clients, with better - or at least comparable - parameters and lower costs. Maybe they cannot compete in big media campaigns, and must thus focus their marketing activities rather more closely on potential clients and make their services more specific to individual clients. However, a strong weapon for alternative operators is their ability to innovate, as they can implement their development plans on a smaller scale, enabling them to target them more specifically on the requirements of customers.

SB: The alternative operators have two possibilities: either to specialise in one segment or to embark on a path of complex growth. The prerequisite for ‘survival’ is to offer products with equally high quality and customer care compared to dominant operators, but at the same time to be more effective. Unlike the dominant operators, alternative operators have a better chance to treat clients individually in various regions and to adapt their marketing communication to individual localities, all thanks to their ability to respond flexibly.

IL: Alternative operators can compete with big operators everywhere that they are able to manage their flexibility, speed of reaction, professionalism, and direct contact with client, i.e. to offer clients extra when compared to the usual products and services on offer, and to be a permanent partner of clients for the whole duration of the service.

JH: Chances to remain competitive are various – from changing products, through stabilisation of customers… to mergers of companies. The right choice of individual possibilities will be proven with time, and those who decide well now will have a clear competitive advantage in the future.

To read the entire survey, please go to

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