Released on = June 12, 2007, 4:17 am

Press Release Author = Bharat Book Bureau

Industry = Telecommunications

Press Release Summary = This annual report offers a wealth of information on the
Telecoms Markets and Statistics in Belarus, Bosnia-Herzegovina, Bulgaria, Croatia,
Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Poland,
Romania, Russia, Slovakia, Slovenia, Ukraine, Serbia, Montenegro, Yugoslavia.

Press Release Body = This annual report offers a wealth of information on the
Telecoms Markets and Statistics in Belarus, Bosnia-Herzegovina, Bulgaria, Croatia,
Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Poland,
Romania, Russia, Slovakia, Slovenia, Ukraine, Serbia, Montenegro, Yugoslavia.
Subjects include:

Infrastructure Issues
Regulatory issues and government policies re infrastructure
Datacomms Infrastructure, Leased Lines, ISDN
Public and Value Added Data Services
Leased Lines, ISDN, Frame Relay, ATM, DWDM, NGN
Infrastructure developments
Brief overviews on all of the major telecommunications carriers and service
providers in the region
Executive Summary

A diverse and developing region, Eastern European telecoms is evolving to meet the
challenges it faces such as competition in the more liberalised EU markets and
offering new services to keep up with demand in developing markets, a trend that
will continue during 2007 as economic growth in the region continues. The non-EU
region as a whole is slowly embracing market liberalisation as part of EU and WTO
ascension requirements, presenting new opportunities for end users, alternative
operators and investors. The Eastern European annual reports have been designed to
offer extensive coverage of the region, highlighting regulatory and market
developments, introducing the major players and the services on offer, as well as
providing a wealth of insightful statistics and forecasts, no doubt making essential
reading for anyone holding an interest in the region's telecoms sector. Data in the
reports are the latest available at the time of preparation and may not be for the
current year.

Central Eastern Europe (CEE)

Liberalised markets are undergoing consolidation, as alternative telecoms operators
are not as successful as initially anticipated. The number of significant
alternative operators is decreasing and further consolidation is expected in the
coming years, with the growing size of the emerging survivors providing scale to
more effectively compete against the fixed-line incumbent.
Converging telecom and broadcasting markets most evident in the competition between
the fixed-line incumbents and cable operators. Cable operators and now fixed-line
incumbents have launched triple play services, bringing the two once-distinct groups
into direct competition in the Czech Republic, Poland and Hungary.
The effects of unbundling are now being seen, with unbundled lines being taken up by
the public, particularly in Hungary, which has experienced the most success out of
the five countries with IP bitstream access. Slovenia is also seeing the beginnings
of access-based competition, with unbundled, shared access and bitstream access
lines numbering in the thousands as at March 2006. We expect unbundling activity to
increase during 2007 as most regulators had only completed analysis of wholesale
broadband markets in 2006.
Baltic

The incumbents still dominate the liberalised fixed-line market in each country, a
situation partly brought about by the regulators which have been slow to complete
the prerequisite analysis of 18 communications markets to identify market
inefficiencies and recommend Significant Market Power (SMP) obligations. A number of
alternative operators do offer services, with the region's well-established cable
operators providing the most competition due to the significant reach of their
networks. We anticipate the alternative operators will make further market progress
in 2007 and beyond as the regulators finish analysing markets, recommend and
implement SMP operator obligations. The primary uncertainty will be how effectively
the SMP operators delay implementing their obligations through the courts, as has
been the case of all SMP operators in EU telecoms markets.
All three fixed-line incumbents share TeliaSonera as either a majority or
significant shareholder, with Latvia the only country where it does not hold
majority ownership. TeliaSonera attempted to further consolidate its position in the
Baltic region by acquiring a significant Baltic IT services operator, a move that
was approved in Estonia and Latvia but rejected in Lithuania.
Balkans

Both Bulgaria and Romania have liberalised their markets as part of EU requirements,
with alternative operators making significant progress in the fixed-line market in
Romania. However alternative operators in the two countries have complained of the
tactics used by the incumbent to delay offering access, a tactic seen all too well
in each EU country which liberalised its fixed-line market. As seen in Western
Europe, the incumbents will eventually accept the regulator's authority rather than
raise objections to every decision they make, but this will take time. Croatia,
Macedonia, Bosnia and Herzegovina, Albania, and Serbia and Montenegro have also
liberalised their markets with important developments such as the issuing of
reference interconnect offers concluded.
Greece has finally transposed the EU's regulatory framework for communications into
national law, a move that will benefit competition and help drive broadband growth,
which is among the lowest out all 25 EU nations.
Telekom Srpske, one of the three incumbent operators in Bosnia-Herzegovina, was in
the process of being privatised in late 2006, which follows the successful
privatisation of the country's publicly-owned mobile operator. Privatisation plans
were also underway in Greece, Macedonia and Romania for each country's respective
fixed-line incumbent. Transferring public ownership of incumbent operators to the
private sector will allow the country's regulators to focus on their jobs,
ultimately benefiting competition in the long term.
Increased large-scale international merger and acquisition activity is being
witnessed leading to the emergence of regional players in the non-mobile markets
such as Hungary's Magyar Telekom, Greece's OTE, Romania's RCS/RDS and Liberty
Global's UPC, a trend which is expected to continue due to recently liberalised
markets.
CIS

Russia's domestic and international long-distance voice services market was finally
liberalised in January 2006. Numerous long-distance licences have awarded.
Conditional to receiving the licence is the requirement to offer services in all of
Russia's 89 regions. Consequently licence holders have rolled out infrastructure.
Belarus is continuing preparations for liberalisation in 2007 as part of World Trade
Organisation entry requirements.
Privatisation of the Russia's state-owned telecoms group Svyazinvest continues to be
delayed. The privatisation of Svyazinvest is significant as it holds controlling
stakes in all seven 'mega-regional' operators that dominate their respective markets
but require upgrades to infrastructure. Privatisation of Ukraine's fixed-line
incumbent has also been delayed again, this time by the need to adopt a new
privatisation program.
Alternative operators are making inroads into the fixed-line market in Russia and
Ukraine. A number of Ukrainian CDMA WLL alternative operators are experiencing
strong subscriber growth, a trend likely to continue given aggressive expansion
plans to offer national coverage expected by 2007. Alternative operator Golden
Telecom is also active in the wireless sector, revealing plans to rollout a mobile
network with UMA capability in Kiev

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