Internet service provider Nextra, a daughter company of Norwegian telecoms firm Telenor and a key player on the Slovak market, this past month finalised yet another local ISP acquisition - that of eastern Slovakia's Vadium company.
Nextra managing director Dag Ole Storrosten explained that his firm had not bought Vadium outright, but rather the Prešov firm's customer base, paying a fee calculated by multiplying a certain sum by the number of Vadium clients - a fee which he declined to specify. Nextra, he said, would now provide services to these new customers, while Vadium would be a partner company offering marketing, development and hands-on support to Nextra's new clients.
The move continues the process of consolidation on the Slovak ISP market, which in the last two years has seen nine purchases by three firms - Nextra, Slovanet and EuroWeb. The latter is a daughter firm of Dutch KPN telecom, while Trenčín-based Slovanet is now controlled by US financial group Advent International Corporation.
"The Slovak ISP market is consolidating," said Ladislav Matušák, chief relationship manager of Internet advisory group Core 4. "Right now, it's controlled by foreign investors. Only [state telecom provider] Slovenské telekomunikácie [ST] and a few smaller local providers remain independent, and with Deutsche Telecom buying ST that will change. Consolidation is a global thing in ISP markets, which are moving more towards telecoms technology as that becomes more important."
Storrosten agreed. "Vadium is a typical local player, focused on the [Internet] access business, with a typical problem - with access prices dropping, like other small players it has had no way to gain critical mass and make a profitable business. We have always said the access business belongs to a few larger players, and that we'll see great expension in Internet niche players."
But while Matušák questioned the wisdom of Nextra's buying dial-up operations, saying the future lay in fixed connections and WAP technology, Storrosten explained that Nextra's strategy at the moment was to amass customer base, and then introduce higher-end products later.
"Right now we are building a country-wide presence. True, analog dial-up will die, and there's a lot of exciting stuff to come, but we'll be there."
