Research and Markets: Broadband Internet Market in Ukraine: Operative Quarterly Results
DUBLIN–(BUSINESS WIRE)– Research and Markets (http://www.researchandmarkets.com/research/7c8d4d/broadband_internet) has announced the addition of the “Broadband Internet Market in Ukraine: Operative Quarterly Results for Q1 2009″ report to their offering.
iKS-Broadband Quarterly – is a regular quarterly report that covers short-term trends in the Ukrainian broadband market and quickly follows all market changes.
This series targets constant monitoring of the changing market situation and covers:
The advantages of this form of research (quarterly report) are regularity and a quick update period. This information can be efficiently used when making management decisions.
According to the reports estimations, the absolute index of broadband internet access revenue volume totaled 530 million UAH in the 1Q 2009. At the same time broadband internet access revenue growth rates dropped by 4,1% or 19.1% of point compared to 4Q/2008. A number of factors affected the changes in Ukrainian broadband access market dynamics.
Primarily they are:
Executive Summary:
In 1Q 2009 Ukrainian broadband market was developing in the tideway of the tendencies typical for past 2 years. The economy crisis and national currency devaluation influenced straight and indirectly the general market development dynamics. The following main tendencies have taken place:
Ongoing consolidation processes result in strengthening of competitive stand of key players. First of all major players keep to the strategy of regional expansion by takeover of small companies (Datagroup and SigmaBleyzer Volia, capital’s FreeNet). Practically all the companies have intensified their efforts on regional markets.
Toughening of competition including lowering of prices resulted in reduction of the average monthly profit per client. On the other hand, tariffs reduction has the positive impact on the number of private users and increases their broadband access consumption patterns.
Ukraine gradually approaches the connection structure prevailing in the majority of countries of Europe, Asia and North America and characterized by xDSL connection type prevalence. Despite Ethernet technology is much more progressive compared to xDSL, we expect that in the next 1.5-2 years number of xDSL connections will reach that of Ethernet connections. In the 4Q 2009 DOCSIS technology has significantly lost its share among newly connected clients as a result of slowdown of Volia’s customers base growth.
Key companies freeze several long-term projects and concentrate on services with fast financial funding return. Market price factor being itself a powerful lever of consumer demand manipulation gains even more importance on the background of crisis.
Ukrainian Internet providers has stuck to passive strategy in 1Q 2009: tariff plans introduced by the majority of players in the end of 2008, has not generally changed. However, the companies go on active developing tariff offers in the lower price category for further expansion of customer audience.
As the major broadband access operators upgrade their networks, in particular, for transition to a high speed access technologies, the users gradually start their considering of operators’ offers in swithing to tariff plans with higher traffic capacity where the price is not much exceeds their current tariff’ cost. Thus, the operators manage to increase incomes constantly with the help of current customers.
Besides, operators actively use targeted mailing to their customers with recommendations to change the current tariff to more expensive and to have more traffic capacity because their existing tariff does not satisfy their Internet access user profile.
Operators use bulk sales of certain supplementary services to the most popular tariff at nominal prices as tool of increasing of service income.
In the end of 2008 the policy of tariff formation was as following: there was clearly seen a tendency of increasing traffic capacity in tariffs with limited traffic and increasing of access speed in unlimited» tariffs. There was also a tendency of switching from the corporate tariffs to individual as they were lower in price and had more traffic capacity. The first quarter of current year has strengthened this tendency in tariff formation. The general economic recession forced some companies to raise tariffs. It was economically grounded due to the large-scale network upgrade having been held before.
Network overload (mainly concerned wireless access operators) has been the negative consequence of crisis management actions in 4Q 2009. So in some cases operators have to reduce the terms of their announced actions.
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