TALLINN - Estonia's mobile telecommunication industry welcomed the arrival of a new player with the official launch of Bravocom on Nov.1. While it can't possibly hope to compete with market leaders EMT and Tele2, Bravocom is aiming to win a share of this lucrative market by offering fixed contract options that will see customers paying only for the services they use.
It took Bravocom some 100 million kroons (6.4 million euros) to launch operations. The Tallinn-based, Estonian-owned company rents its network towers from Radiolinja mobile-telecommunication company but issues its own SIM-cards and phone numbers, and has its own customer support operations.
Unlike the other major players in Estonia, Bravocom does not sell mobile phones, although it may consider doing so in the future. At the moment the company offers a prepaid GSM card and a contract service under one trademark.
Bravocom's arrival on the scene comes just two months before another major change is due to drastically shake up the telecommunication market. As of next year, Estonian mobile phone users will be able to change phone operators while keeping their old numbers, something that could radically alter what is presently a cozy state of affairs.
"Despite the fact that from the beginning of the new year clients will be able to change their operators without changing their numbers, we believe there is still a certain demand for new and simple numbers," said Peep Poldsamm, Bravocom's CEO.
According to Poldsamm, Estonia may witness over a dozen new virtual and service mobile telecommunication operators in the near future. The Finnish service operator Saunalahti has recently found a network solution that allows it to operate in both Finland and Estonia, greatly boosting its sale of prepaid GSM-cards.
Before Nov.1 there were three operators covering the Estonian market of over 900,000 mobile- phone users. Judging by the number of SIM-cards that have been issued, the largest one, EMT, had up to a 47 percent market share while Tele2 and Radiolinja had about a 37 percent and 16 percent market share respectively, according to EMT.
A spokesperson for EMT, however, said that the company was not worried about the new operator's appearance, as it was neither offering new services nor attempting to win over new clients with drastically low prices.
Bravocom is offering about 10,000 original numbers starting with the digits 545. The company is also offering fixed contracts that ensure clients only have to pay for whatever services they use without the additional cost of line rental.
In neighboring Finland, some 1 million people, or 25 percent of cell-phone users, reportedly changed their operators as a result of the introduction, which will soon be introduced in Estonia. Analysts are predicting that up to 180,000 Estonian residents will change their mobile network operator at the beginning of 2005.
All four operators in the country have stated that they hope to lure new clients during the network change, and everyone accepts that a price war will continue for some time. Meanwhile, the three established operators recently introduced special contract options for business clients that have seen call costs cut by several times the regular price.
Analysts are also predicting that Estonia's mobile telecommunication company profit margins will fall over the next few years due to the increase in competition. One such example of this trend can be seen with market leader EMT's ARPU (Average Revenue Per User) rate, which has decreased from 423 kroons (27 euros) to 378 kroons since last September. Needless to say, all of this will come as music to the ears of Estonia's ardent mobile phone users.
