Incumbent Telephony Tariff Strategies in Central Europe: Lessons for Liberalizing Markets

Due to a huge increase in usage of mobile telephony services and liberalization of the national fixed-line services markets, the major part of CEE incumbent operators have been forced to change their tariff systems considerably for last few years. Although the changes differed significantly, the idea behind them was the same: to prevent sharper drop in revenues after the appearance of competitors.

This study provides an overview of tariff systems used by incumbent fixed telephony operators of CEE countries. In addition, it brings case studies of incumbents offering their services at the markets of Croatia, the Czech Republic, Lithuania, and Romania. The lessons learned in those four countries should help the incumbents operating at CEE markets that are still to be liberalized to meet the requirements of the regulator and preserve positive revenue trends.

"If created properly, a tariff plan can be the most powerful weapon in the hands of a communications services operator. It can prevent users from churning, attract other operators' customers, and help operators maintain revenue growth. While all the ingredients of a winning tariff plan are known, operators need to use them in the right proportions." – Krešimir Alic, Senior Analyst, IDC CEMA