The Romanian Internet market has taken a definite upward trend for the past six months, which can be seen in ISP revenues, the number of national and international sites surfed by consumers and the range of services.
This trend should normally maintain over the next few years, according to Marius Panait, KPNQwest Romania general manager.
Although the number of PCs connected to the Internet has been increasing lately, the number of PCs to 1,000 inhabitants is quite low in Romania, so there is enough room for improvement, Panait considers.
The current trend in the West and especially in the US is opposite, as the market reached maturity, although saturation is out of the question for the time being.
It is actually a cyclical phenomenon, Panait says: "supply exceeds demand, prices fall, some operators disappear or they are swallowed by large companies likely to survive. After a while, demand will exceed the supply and the trend will reverse."
Unlike in the US, "demand will be higher than supply in Romania for a long time from now on."
Marius Panait considers that one of the most difficult problems ISPs are facing is the lack of money to pay for these services, which may be linked to the market's poor education. Internet can cut business costs and ISPs must make companies aware of that.
The companies for which Internet is a "business enabler" can prove it: they cut costs and send information, bills, data bases or even organise video-conferences through the Internet, and they also started doing e-business.
The market structure is likely to maintain over the next five years, but the landscape will certainly change. The most important moment will be January 1, 2003, when the telecommunication market will liberalise.
"It does not mean that we will have then exactly ten international ISPs willing to offer their services. But costs will decrease, there will be competition in telephony and other operators will be willing to invest."
KPNQwest expects 5-6 large providers to operate on the market after that moment and RomTelecom will be among them as it will offer data communications, telephony, Internet, voice transmission.
Moreover, there will be twice more operators with national coverage, cable TV firms, the four GSM operators and more companies trying to build their own regional networks and to buy infrastructure for international access.
The moment when multinational companies decide to invest in Romania will coincide with the time when legislation is clarified and the market will be freed of the monopoly, thus "favouring the best and not the best-connected."
Panait considers that a significant international player is likely to enter Romania even earlier in order to get prepared for January 1, 2003, though it is quite unlikely to build a nation-wide network within less than 18 months. KPNQwest plans to become a market leader in the field of network communications by yearend.
KPNQwest had a market share of 7% at the end of last year and 15% now. Panait thinks the company has an edge over its competitors, namely international expertise and experience of the three big ones: "KPN telecom, Internet Qwest telecom and provider and EUnet experience."
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