The telecom market is set to expand rapidly with operators expected to poach one another's customers.
Mobile Internet services will be crucial to operators' ability to maintain high revenue growth rates amid the ongoing decline in rates for voice services, and operators will have to win customers from rival companies as the mobile telephony market matures, believes Richard Moat, Orange Romania CEO. He has recently extended his CEO mandate for another two years at Orange, a company that raked in revenues worth above 1.2bn euros last year, and entered the top ten Romanian companies. From this point of view, Moat is one of the most important executives domestically.
"I believe competition will tighten amid the rising penetration of the mobile telephony market, so that the focus will be on retaining already existing customers and on efforts to lure customers from other operators as the possibility of attracting new customers will be very low," Moat told ZF.
"The market is about to mature. Since 2006, when penetration stood at a little above 60%, it has now reached over 100%".
The number of SIM cards reported as in service by Romania's five mobile telephony operators went beyond 23 million as early as the end of last year, and thus exceeded the number of Romania's citizens by two million.
Orange is the market leader, with over 10 million customers, followed by Vodafone with almost 9 million customers and Cosmote with more than 4 million customers. The market also includes RCS&RDS with over 800,000 customers, and Zapp, with around 500,000.
Moat says that in under the circumstances, service quality will be key as regards the ability to retain customers because rivals can rapidly copy new services and products.
He believes that within the next two years one of the key areas of competition between operators, which can set the market leader, is that of data services. In the first quarter of 2008, around 10% of Orange Romania's revenues (28m euros) were generated by non-voice services.
"(...) I believe the market will continue to rise and the economy will not slow down. Thus, the business segment will see significant growth and demand for ever more sophisticated services will rise, whilst the company that manages to cover these requirements will be the market leader," considers Moat.
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