Prague, November 26, 2004 -- The total number of Internet connections in Central and Eastern Europe is expected to reach 8.1 million at the end of 2004, up 20% from the previous year. According to a new IDC study, while growth in dial-up connections is slowing, users are migrating to broadband technologies such as DSL and cable.

“Migration from narrowband services to broadband accelerated sharply in 2004,” said Joshua Budd, a senior analyst with IDC CEMA's telecommunications group. “While historically dial-up has accounted for the bulk of the Internet market in Central and Eastern Europe, the widespread rollout of DSL and cable Internet is boosting broadband usage throughout the region.”

Although spending on dial-up services in CEE is expected to decline over the forecast period, broadband adoption will offset this loss and ensure continued growth for the Internet access market as a whole. IDC's most recent forecasts indicate that total spending on Internet access is expected to reach $1.76 billion for the region in 2004.

“Spending on broadband is growing quickly, but at the same time, service providers are coming under increasing pressure throughout the region to lower monthly tariffs,” said Budd. “To meet the demand for less expensive services, ISPs are offering lower bandwidth connections that are less costly for the end user. This is helping to boost broadband penetration levels in some countries but it is also presenting a challenge to operators that are faced with lower average revenue per connection.”

Poland, Hungary, and the Czech Republic are expected to account for nearly 70% of the region's total connections in 2004 and 60% of spending. DSL has become the most widely used broadband technology in these countries, although demand for cable Internet is continuing to grow.

“Although Poland, Hungary and the Czech Republic account for a large share of the region’s market for Internet services, there remain large gaps in terms of Internet penetration and development from country to country throughout CEE,” said Budd. “While some countries like Estonia and Slovenia have penetration levels on a par with those found in Western Europe, other countries in the region, like Bulgaria and Romania, have a long way to go before they catch up.”

IDC's Central and Eastern Europe Internet Access Services 2004-2008 Forecast provides the latest research on Internet access adoption rates and trends in Central and Eastern Europe. The Internet access technologies covered in this study include dial-up (PSTN and ISDN), leased line, and broadband (DSL, cable, FWA, powerline, fiber and satellite). Countries included are Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The following questions are addressed: What are the key growth areas for Internet access services? Which countries are leading the market in terms of Internet adoption? Who are the leading Internet access providers in the region? How is the market divided between the consumer and business segments? What are current tariff levels for Internet access services across the CEE region? What are consumer and business Internet penetration levels across the CEE region?

For more information, please contact Mikhail Novikov (+7 495 975 00 42) in Russia, Ukraine, or any of the CIS countries; or Tatiana Hinova (+420 221 423 140) from anywhere else.

About IDC
IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com.