Slovaks can Dial from June, but will anyone call?

9 May 2003

Dial Telecom, an alternative operator in the Slovak fixed line telephony market, is preparing to launch commercial services in June this year, in what will be the first challenge to the dominance of incumbent telco Slovenske Telekomunikacie (Slovak Telecom). However, given the former monopoly’s stranglehold on the sector and its strategy lowering tariffs and improving service offerings to stave off competition, it will be interesting to see if Dial can wrest market share away from the PTO. Prior to the opening up of the fixed line market at the start of 2003, Slovak Telecom hiked its monthly line rental charge and attempted to eliminate the subsidisation of local calls from its long-distance and international businesses. As a result, it is thought that any challenge to its leading position in the local access market is likely to take more time to develop, with companies such as Dial Telecom facing major challenges in the short to medium term. At the end of 2002 Slovak Telecom reported that the total number of access channels had dropped by 6% compared to 2001, from 1.58 million to 1.46 million. At that date it was the leading provider of online services with a 52% market share of dial-up traffic and nearly 70,000 customers. On the downside, revenues for the year decreased by EUR19 million to EUR441 million. The fall was attributed to a downturn in general economic conditions in Slovakia and the increased substitution of fixed line traffic by mobile communications.

Dial Telecom, a Slovak joint-stock company with equity totalling SKK60 million, is set to sign an interconnection agreement with Slovak Telecom in June, paving the way for its full service launch. According to the company’s General Director David Becvas, Dial has accepted the pricing schedule put forward by the PTO and is currently discussing the technical aspects of interconnection. Dial has been active in the Slovak telecoms services market since September 2000, on the basis of a General Authorisation issued by the Telecommunications Office of the Slovak Republic (TU SR). In February 2001 the TU SR awarded the start-up a licence for the provision of public telecommunications services, data transfer and leased lines. A number of other newcomers have been licensed to offer public telephony services including Aliatel Slovakia, BT Slovakia, ConnSpe Telekom, eTel Slovensko, GlobalTel Slovakia, Nextra, PosTel, ViaPVT, Voipac and ZSR. Most of these have requested interconnection talks with Slovak Telecom.

Source: Datafile of Eastern European Telecommunications