Article at a glance:
Central and Eastern Europe's fixed-line telecom incumbents—unlike their Western European counterparts, burdened with massive debt and dwindling margins—boasted hefty profit margins in 2001. But those high returns will be hard to sustain in the face of increased competition, deregulation, and the strong appeal of mobile phones.
The take-away
These former monopolies must improve their productivity and customer service to counter the impact of full competition when their countries join the European Union. They must also target new growth engines, such as data transmission, to make up for saturated fixed-line voice-telephony markets.