Boston, MA -- (ReleaseWire) -- 01/09/2014 -- During the quarter ending September 2013, the Romanian market registered its largest total of net additions since Q309, posting an increase of 262,000 and reversing a steady trend of decline. BMI does not believe that this is the beginning of a new trend towards growth, and still expect a continuing pattern of slow growth or net losses to be the norm as penetration is over 126%. The market benefits from a good level of competition between major international players, all of which have launched LTE services as of May 2013. With smartphone penetration reaching 27% of Orange's customers, we expect the development of mobile data and value-added services to become the key driver of growth for these players. The ongoing privatisation of incumbent Romtelecom will see the removal of the government from its stake, benefitting the fixed market with increased investment. Key Data
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- Inactive subscription discounting has been a drag on mobile subscriptions. However, it has returned to the first subscription growth since H212 in Q313, following consecutive quarters of subscription loss in H113.
- The latest data from ANCOM show that fixed and dedicated mobile broadband subscriptions continued to grow in 2012 as overall penetration reached 21.9%.
- Mobile ARPUs have continued to trend downwards following the brief stabilisation that accompanied the period of inactive subscription discounting. BMI expects price competition and IP substitution will contribute to gradual but ongoing declines in ARPU over the medium term.
Key Trends And Developments
Further rate cuts of around 70% were proposed in August 2013, following a public consultation from ANCOM. The regulator proposes that, starting from 2014, the maximum tariff for fixed call termination drop from 0.67 to 0.15 eurocents/minute, while the maximum tariff for mobile call termination would plunge from 3.07 to 0.86 eurocents/minute. Local operators Cosmote, Orange and Vodafone have all expressed their opposition to the cuts, claiming that reduced revenue and profits and will limit future investment in next generation networks. A study by KPMG conducted on behalf of these companies, found that the Romanian state will lose taxes worth EUR13mn per year and operators will lose total revenues of EUR206mn. Fixed-line provider RCS & RDS has come out in support of the proposed cuts, however.
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