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Telecom revenues down again

REVENUES of firms in the Slovak telecommunications market fell last year to €2.037 billion in both the mobile and fixed-line segments, 3.4 percent less than in 2010, according to calculations by Orange Slovensko, one of the main telecom operators in Slovakia, the SITA newswire wrote.

More customers and services but less revenue.More customers and services but less revenue. (Source: SITA/AP)

REVENUES of firms in the Slovak telecommunications market fell last year to €2.037 billion in both the mobile and fixed-line segments, 3.4 percent less than in 2010, according to calculations by Orange Slovensko, one of the main telecom operators in Slovakia, the SITA newswire wrote.

Pavol Lančarič, CEO of Orange Slovensko, said the key factors influencing last year’s revenue levels included significant competition in the market and regulations.

“Regulation is a process that still persists and still fundamentally influences our business,” Lančarič stated, as quoted by the SITA newswire, adding that both factors have had a negative impact on investment in the telecom sector.

Orange reported the market share for the two biggest companies decreased in yearly terms but the third mobile operator, O2, recorded an increase of 2.4 percentage points to reach a market share of 7.7 percent. Orange’s market share fell by 0.4 percentage points to 35.8 percent and Slovak Telekom’s market share fell by 1.8 percentage points to 44.1 percent. UPC Broadband Slovakia’s share of the telecom market decreased 0.1 percentage points to 2.5 percent.

However, Slovak Telekom (ST) disagreed with the methods used by Orange in its calculations because it used ST group’s unconsolidated data for 2010 and consolidated data for 2011. According to Andrej Gargulák of Slovak Telekom, using the consolidated data consistently narrows the annual drop to 0.9 percent for ST and to 1 percent for Orange. Using the consolidated data also changes the firms’ aggregate revenues for 2010, Gargulák said, noting that revenue shrank in 2011 but by less than Orange had calculated.

Lančarič told SITA that the telecoms market is unbalanced because the number of users is growing but revenue is going down, asserting that telecom operators must serve more and more users and offer an increasingly wide range of services but receive less revenue for doing so.

“This contradiction has been here for some time and it could continue for some time but it will not last forever,” Lančarič added, as quoted by SITA.

The analysis prepared by Orange indicated that the share of mobile voice services in overall revenues of the Slovak telecom market was 72 percent, up 0.5 percentage point compared with 2010.
Mobile data accounted for a 4.3-percent share of revenues and their portion declined by 0.4 percent from the previous year. Fixed-line voice services accounted for 11.2 percent of overall revenues, down less than one percentage point from the earlier year and fixed-line internet had an 8.9 percent share, up 0.7 percentage points from the previous year. Nearly 68 percent of all customers last year used mobile voice services, almost 8 percent used mobile internet, 14.2 percent used fixed-line voice services and 10.3 percent used fixed-line internet services.

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