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VoIP Charges Into Central and Eastern Europe on the Back of Broadband Rollout, Says IDC (28/11/2005)

The era of VoIP telephony is beginning in Central and Eastern Europe. According to a new IDC study of 11 CEE country markets (not including Russia), compared to 2004, the number of VoIP minutes will more than quintuple this year and more than triple in 2006. Meanwhile spending will more than double this year and grow by 80% in 2006. Still a relatively small part of the overall telephony market, VoIP will eventually become the technology of choice for businesses and consumers looking to cut their monthly phone bills. Nevertheless, total spending will slow after a couple boom years, as VoIP will be increasingly bundled with broadband-based service packages.

"Rapid broadband deployment in 2004 and this year has given VoIP providers access to a massive base of technology-savvy customers," said Emir Halilovic, senior analyst, Communications, IDC CEMA. "Moreover, the presence of these connections has opened doors to alternative operators, creating a more competitive telephony environment and further fueling uptake of VoIP as a service in itself as well as a possible value-add to other Internet services."

Because of the potential savings, uptake among small offices and small and medium businesses will outpace uptake among consumers for the foreseeable future. Furthermore, small and medium-sized businesses will adapt VoIP solutions more readily than large enterprises, as smaller organizations are more likely to have straightforward calling needs satisfied by a standard package (i.e., unlimited calling to anywhere in the EU).

"Most VoIP traffic is for international calls and is likely to remain so in the near future," said Halilovic. "But this will change as more comprehensive VoIP services became available; eventually domestic call volume will match or surpass international volume."

Poland was the largest single country market for VoIP traffic and spending in 2004 and will be again in 2005. Hungary was the second largest and the Czech Republic the third largest. Together, these three countries account for roughly 47% of the total CEE market for VoIP. For 2004 to 2005, all three countries will see the number of VoIP minutes shoot up by more than five times.

"It needs to be kept in mind that the rapid increase stems from the fact that we're starting from a fairly small base," said Halilovic. "After 2006, annual traffic growth will slow to high double digits and spending to middling double digits."

IDC's Central and Eastern Europe VoIP 2005-2009 Forecast (Doc #EI03M, October 2005) analyzes the VoIP services market in 11 Central and Eastern European countries (Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia). The study includes forecast and analysis data on the number of outgoing minutes of use for IP voice traffic, and segments outgoing VoIP traffic and VoIP spending by residential and business users. The information provided in this study is essential reading for telecoms, IP service providers, and Internet service providers that are interested in offering VoIP and related enhanced IP services in the Central and Eastern European telecommunications market.

www.idc.com