Orange Romania plans for 3G upgrade

Mobile telephony operator Orange Romania is interested to buy a 3G licence but the investment in building the network will not begin any sooner than 2006, Yves Gauthier, the company’s commercial manager said. And this is only in case the auction for the 3G licences is held next year.

The 3G bet is quite risky if considering that in Western Europe, where the licences were awarded for a great deal of money (up to tens of billions of dollars in some cases) several years ago, only a handful of operators in a small number of countries actually launched commercial 3G services.  The 3G services will enable clients to use mobile phones both for voice and high-speed data transmission, including audio and video content.

The Orange Romania representative added that, besides the price of the licence, $35 million, the investment in making the 3G network and services operational will amount to approximately $150-$200 million. As for the popularity of this new technology on the Romanian market, Gauthier said a UMTS service would never be able to reach the same number of customers as the 2G telephony (GSM), yet demand in Romania was sufficiently high to be worth the investment.

The Romanian mobile telephony market could come to total about one billion dollars by yearend, while the number of mobile service users will exceed six million. Top operator in terms of number of clients is Connex, which had more than 2.7 million mobile telephony service users on June 30. Orange had 2.59 million clients back then. In the meantime, Connex has announced it crossed the three million clients threshold. Farther down the line is Zapp, which hopes to see 200,000 users by the end of 2003. The cash-flow problems it is having right now have led to the fourth mobile telephony operator, Cosmorom totalling a little more than 80,000 customers.

Communications and Information Technology Ministry (MCTI) has repeatedly promised over the last eighteen months it will hold an auction to award four 3G mobile telephony licences valid for 15 years. Government Decision 1113/2002 stipulates the licences will be renewable upon request from holders for 10 years free of charge.

Until such (3G) time comes, Orange is making adjustments required by the fiercer competition on the international calls market, as a result of the deregulation of the communications market on January 1, 2003. To that end, Orange yesterday announced this year’s second cut in the international call prices. Orange’s international call tariffs for all its clients will become 15% lower for the countries in Zone 1 and Zone 2 (which include Europe and the United States among others) on the average as of October 20. The company says it will be possible for Orange subscribers to call the Republic of Moldova for 40 cents a minute and US, Europe, Canada and Israel for 60 cents a minute. The tariff for calls to other countries is $1.17/minute.

iuliana.susanu@zf.ro