Internet Penetration In Central and Eastern Europe To Reach 17% in 2003, Says IDC
PRAGUE – FEBRUARY 18, 2003 – Internet usage rates in Central and Eastern Europe (CEE) continue to climb steadily, driven by users in the workplace and schools, according to a new report from IDC. The percentage of the population using the Internet at least once a month in the region is forecast to reach 17% in 2003 and 27% in 2006.
"Although research indicates penetration levels in the region are continuing to grow, the market is still trailing behind Western European levels. This trend should continue through 2006," said Joshua Budd, Senior Analyst with IDC CEMA's Telecoms and Internet group. "Low home penetration rates across the CEE region are preventing the market from reaching its full potential."
"Estonia and Slovenia stand out as leaders in the region, as both countries have Internet penetration levels on par with Western Europe," Budd added. "This can be attributed to government efforts to promote Internet usage in schools and public access points, as well as to private initiatives among businesses to promote the Internet."
Increasing Internet penetration levels are also contributing to growth in the region's ecommerce markets. While B2C ecommerce still accounts for a small percentage of the total ecommerce market, the appearance of several new emarketplaces in the region and the growing availability of PCs and office supplies for sale on the Internet are pushing B2B revenue upward.
Total ecommerce spending in the CEE region is projected to reach $4.4 billion in 2003. Of this total, B2B will account for 90%. B2B will continue to constitute the bulk of ecommerce spending over the next five years. In 2006, the total ecommerce market should reach a value of $17.6 billion.
"The key ecommerce markets in CEE continue to be the Czech Republic, Hungary, and Poland," Budd said. "Together, the three countries represent nearly 90% of the CEE market's total value."
One of the main inhibitors to ecommerce remains the high cost of Internet access and low Internet penetration levels in the region. The growing availability of broadband access services, particularly in Poland, Hungary, and the Baltic States, should drive the market forward in terms of both time spent online and penetration. Still, Internet usage in the region is currently driven primarily by dial-up Internet access.
According to IDC's report Internet Access Services in Central and Eastern Europe, 2001-2006, total Internet connections are projected to reach 5.6 million in 2003. Dial-up connections should represent approximately 85% of the total.
"Broadband will have to become more widespread throughout the CEE region and home penetration levels will have to increase before the market reaches its full potential," Budd commented.
The Internet Usage and eCommerce in Central and Eastern Europe, 2001-2006 (IDC# EI05J) report sizes and forecasts Internet usage and ecommerce both for the region as a whole and on a country-by-country basis for Bulgaria, Croatia, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia, and Slovenia. Web user and Web device numbers are segmented by three access locations: home, work, and school/public access. eCommerce is segmented by B2C, B2B 'end-use', and B2B 'process' or 'supply chain'.
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