02 Jan 2017

Prague, FOR IMMEDIATE RELEASE – Revenues that the Central and Eastern European (CEE) telecommunications services operators generate from non-core-business revenues will continue to grow throughout the 2016–2020 forecast period, as both competition and regulatory pressures increase, forcing telcos to try their luck outside their stagnating traditional service areas.

The latest analysis by International Data Corporation (IDC) showed that the combined revenues from all non-telecommunications services (including equipment sales) constituted 14.6% of the total revenues reported by the eleven observed CEE incumbent operators in 2015.

ICT services and the distribution of gas and electricity remain the most important areas of interest for telecom operators outside their core industry, but CEE operators also continue to search for new revenue streams.

"It is not news that telecommunications operators sell financial services, energy, electronic appliances, and even household maintenance services,” says Kresimir Alic, senior program manager at IDC. “The news is that these companies have started to change from passive providers of utility-like services to dynamic entrepreneurs able to quickly seize an opportunity on any market.”

In 2016, however, we expect somewhat slower growth of the incumbents’ non-telco revenues. This will mostly be a consequence of a decline expected in the energy services segment, following Magyar Telekom's exit from the residential gas business and the transfer of the B2B energy business to a separate joint-venture company. Nevertheless, IDC is convinced that the growth rates will recover quickly, driven by increasing demand for terminal equipment (smartphones), and a growing number of business endeavors by telecom operators in various non-telco industries.

About the Research

In this IDC report, CEE Telcos Beyond Telecoms in 2016 , we explore the recent changes in the business strategy of CEE telecommunications services operators (the companies' aspiration to search for new revenue streams outside their core business area). This study is based on analyses of the revenues of telecommunications operators providing their services in eleven CEE countries: Croatia, the Czech Republic, Hungary, Latvia, Lithuania, the FYR Macedonia, Montenegro, Poland, Romania, Russia, and Slovakia. In addition to an overview of the current situation, this study provides a forecast of developments in this area.

This report is an update of the following studies:

• The Era of Opportunism: CEE Operators Are Set to Challenge Their Luck Outside the Declining Telco Industry (IDC #CEMA21446), published in September 2014
• The Era of Opportunism: 2015 Update (IDC #CEMA23269, published in September 2015