Mobile News

Prepaid has significantly driven growth in eastern Europe in 2000. Prepaid constituted nearly 40% of the total subscriber base of most top prepaid markets. Prepaid now accounts for 12.7 million subs in Eastern Europe, 46% of the total subscriber base. The market tripled in both 1999 and 2000.

Eastern Europe is an interesting market, only six countries have a penetration rate above 20%, yet service offerings are often very advanced and this is especially reflected in prepaid. Prepaid has also been successful due to the poor economic situation in eastern Europe, with many markets still adapting from communist to capitalist regimes. Less of a stigma is attached to a prepaid mobile than was intially the case in western Europe and a parity of service between contract and prepaid has been the norm.

Often eastern Europe markets have been characterised by low subscriber growth, until the entry of a second and possibly a third operator broke the monopoly of previously state-owned incumbents. New entrants are frequently owned by successful Western operators and their experience and branding has been very evident in their marketing strategies for prepaid services. Mobile operators in the region have implemented comprehensive multimedia campaigns, often with racy commercials such as Eurotel Bratislava’s (Slovakia) “either your EASY or you’re not” prepaid slogan.

In many ways, eastern Europe could be seen to be ahead of more mature western European markets, in terms of prepaid strategies, innovative loyalty programmes and advanced VAS. There has been a widespread introduction of new recharge methods such as ATM and Internet reload, providing a diversity of top-up methods. More extensive distribution channels, such as convenience stores and own-branded shops to nightclubs and even mobile vans, like the Oskarvans in the Czech Republic, have been developed.

Advanced value-added services and pricing methods are being introduced in an attempt to raise ARPU, although it is yet to be seen whether this will reap dividends.

However, with the introduction of GPRS these new VAS may become more viable. 3G licences are yet to be awarded in many eastern European markets with most not set to launch until 2009/10 at the earliest. The cost of licences could negatively impact 2.5G service development.

The Czech Republic is by far the biggest prepaid market  with 3.3 million prepaid users and a huge 76% of its base on prepaid. Croatia has also been hugely successful at promoting prepaid with 69% of its base using prepaid services.

Eurotel Praha and Paegas are the top two prepaid operators in the region followed by the Hungarian operator Westel.