Competition in the marketplace is a requirement economic progress. Perhaps a majority of my readers take that for granted. Nonetheless, it would be safe to say a large number of communist party cronies never learned that lesson when they were centrally planning how to suck blood out of turnips.
It wouldn’t be hard to believe when the SRI backers of Illiescu’s coup d’etat got the payoff of suddenly owning state industries, most of these ill-gotten gains were left on cruise control as the inheritors of largess splayed themselves for various corporate suitors. The different relatives of political allies and fellow criminals surely found nice jobs in various management roles.
The long and short of it is that, with some exceptions to the rule, captaining of the economic machinery remained in the hands of people who not only didn’t know how to compete, but very likely didn’t have the wherewithall to even try. A stagnant culture of the privileged has been ensconced in many Romanian industries and their lack of innovation is testimony.
Over fifteen years later, most “revolutionaries” have long since cashed-in by divesting themselves of majority interest in any number of firms and moved on to find younger wives while foreign investors breathed new life into old entities. Meanwhile, many aspiring Romanians have leapt roughshod onto the back capitalism — that bucking and brawling beast — hanging on a full 8 seconds to profitability.
But not Romtelecom.
Nossir. It seems they’ve had a goodly percentage of upper management who hail from the old school of indulgence. As the formerly state-owned, fixed phone monopoly sat on its’ collective duff with respect to improving service offerings, a number of cable companies scurried about quickly harvesting nuts in the form of broadband internet access and IP telephony services, in addition to the requisite delivery of all those mindnumbing TV shows slapped togther to sell ads.
And let’s not forget Romtelecom’s failure to win any significance in the wireless market. While the old men upstairs did, technically, have CosmoRom cellular on the books, no one seemed to press down the accelerator in any serious way. Connex and Orange simply walked away with the entire marketplace without any noteworthy challenge from Romtelecom. Heck, even the underestimated Zapp outperformed Albastru Mare.
A distant, but increasing threat, to the viability of Romtelecom’s presence in Romania has been rollout of DECT (and, most recently DECT+VoIP) in limited cities which not only undermines equipment and installation revenue but (now) further foments a potential technological leapfrog over the need to have any POTS phone whatsoever.
One might counter that nearly all ex-monopolies of European governments have failed in various markets, so there’s nothing new under the sun. Heck, even AT&T has been losing ground on nearly all fronts for quite some time. And maybe you’d be right.
The wealthy folks who run these institutions seems to get only one thing done well. They all successfully advertise, advertise, advertise. They have professional posters, brochures, television spots, and print ads. Clear, crisp designs that follow a style guide developed by someone with experience.
Not that their marketing efforts actually have a message to communicate. No, most of the time, it seems the telecom giants simply follow in the vague branding footsteps of cola products and prescription medicines. You get weird advertisements full of people who look nothing like you (and, in this case, I mean they don’t even look Romanian, let alone typical Romanian) who are constantly smiling about things you don’t understand.
It’s the latest trend in branding. Happy people who always laugh, look more attractive than you, dress better than you, have more free time than you, and own more expensive things than you. Don’t you see it? It’s everything they want you to want yourself to be. And it doesn’t actually mean a thing. Image over substance.
Starting to sound a bit rantworthy, eh?
Alright, so let’s take a look at what’s been happening lately. I think the old guard commies have been slowly pushed out of their entrenched cubicles of the Romtelecom bureaucracy. See, somewhere around 2002, the national telephone company of Romania was bought by some Greeks.
I imagine the first order of business was to circle the wagons, lop off any limb bleeding like a stuck pig, initiate the purging of deadweight in failed management, and plant the seeds for corporate-wide re-education. For a while, it must have looked a bit like the bumbling three stooges as they dropped the ball a couple of times, but I’d say they’re just now starting to get things right.
Sure, they still have radically overpriced telephones for sale in their little stores which no one but bunica buys. But just take a look at the big turn-around in the wireless market; they’ve literally pulled off a miracle with Cosmote, by erasing the past failures, launching a new brand of the same thing, and creating enough room for them to be taken as a serious player. They’re bareknuckle fighting with better plans and better prices.
And then there’s broadband, the particular service which most interests me.
One year ago, Romtelecom had just launched their very first 2Mbps ADSL service. In fact, it was so new that when I walked into their main office in the centru, the sales reps swore up and down that no such service existed. A guy would actually have to argue with them, pull up their very own website on their own computers to show them, and even go so far as to demand they call supervisors, managers and Bucureşti. Finally, they admitted it.
“Oh, yeah, well, I guess you’re right… looks like we do have a 2Mbps internet.”
That’s how reality on the ground was just a year ago. By American standards, 2Mbps was fairly laughable. Then again, by western European standards, it was entirely laughable. Not only did Romtelecom’s own employees never hear of the service, but they stared at my dumbfounded that I would actually sign a one year contract to pay 100€ per month.
Sure, all Americans drop gold coins out of their pockets, but who would seriously pay 100€ per month for internet access at home? Heh. If it came down to a choice, I’d rather stop eating.
There were other options, of course. For 50€, Romtelecom offered a 1Mbps ADSL service. And I knew that some people were getting some limited cable-based internet access for even less money, although it was only the local loop which was high speed whereas real connections to the internet were tepid.
The thing you need to realize is that information is so last year.
For the upcoming 2007 business year, Romtelecom has undergone a fairly serious mini-revolution with respect to its internet service offerings. In a recent bill sent to me in the mail, Romtelecom included a little brochure about their new prices for broadband service via the ClickNet brand/partnership.
Say, what an exciting time to be alive. That’s pretty impressive to drop the 1Mbps service from the old 50€ price down to only 15€! Enter the mysterious yabbit, because I’m not going to buy such a slow connection. Maybe if we open the brochure and read on a little further, we’ll discover something of a bit more interest.
Aha! Now, we’re talkin’ turkey, folks. Whereas Romtelecom used to charge 100€ for 2Mbps, they’re now offering me even more bandwidth at 2.5Mbps for about a third of the price, only 29€.
Clearly, this is evidence that the cable companies’ heretofore unchallenged dominance of the Romanian internet access market has finally caused enough changes in the management of Romtelecom such that someone is actually doing something about it. Oh yeah, baby, this is the main benefit of the free market system at work. Better products, lower prices.
I’d go so far as to say it’s pretty obvious Romtelecom now has the best offer on the market, just like that. And since the cable companies are eating into the fixed phone business by offering internet+VoIP, now Romtelecom is sensibly offering a compelling bundle as well, in order to compete on par for those customers currently buying bundled services from cable companies.
I have to imagine that in another year or two there is a strong chance that Romtelecom’s offer will yet again improve, as they battle cable companies in tit-for-tat skirmishes just as happens in the United States and other industrialized nations. It’s good for both customers and the businesses themselves in the long-run.
Here’s a first! Romtelecom’s ClickNet finally allows you to conduct your own installations. I remember 10 years ago when DSL companies in America would require some bozo to come out to your place and install some mickeymouse PPPoE software onto your machine (half of which was spyware or adware) or they’d refuse to provide service.
That’s where Romtelecom was last year. I had to wait not only for someone to process my order, provision the line, and then activate the circuit on the local DSLAM, but then two clowns had to come into my place and muck around for nearly an hour. Neither of them had any real computer experience.
They only knew how to tinker with Windows XP, which left them in a sore spot when it came to Windows 2000 Server or Windows 2003 Server. The Macintosh both intrigued and frightened them. Ubuntu and linux were two words they’d never heard of before. In fact, they insisted that “the internet” was only compatible with XP.
Given my strong distaste for XP, that created something of a problem. Of course, in the end, they couldn’t get anything to work at all, so I dabbled around a bit while they watched me solve all the problems in order to bring myself online. Still, they were friendly guys and I was starving for bandwidth, so I thanked them a lot for stopping by.
And then when I moved across town, the whole Romtelecom circus repeated.
Usually the theory is that the customer is an idiot. So, the telecom providers feel the need to send out a few of their entirely too many technicians to the scene of each incident. Eventually, companies learn this hurts profits by increasing installation costs as well as potentially disaffects the customer with undesirable scheduling delays. So, they end up adopting self-installation kits.
The customer orders DSL service, a modem in a box arrives at their door, the user does the 30 seconds of configuration work, and everything happens faster. At worst, a truely lost customer may not read the directions and have to call the company for two minutes of handholding.
I’m generally averse to people touching my computers. I tend to lock them with passwords, too. So, you can imagine that I’m very happy to see self installation kits available in Romania. No longer do I have to let some befuddled “eXPert” with bushy gray eyebrows fumble his way through computer dialogue as I embarrass him by snorting indignantly over his shoulder.
Notice they offer three different kinds of modems, too. I’m not at all sure what reasonably intelligent person would want a USB-connected ADSL modem. It’s entirely too limiting, but I suppose there are ignorant and lazy people. Why would Romtelecom offer lower prices for it? Why, to keep you restricted to only one computer online, of course. Odds are that a single computer won’t eat up as much bandwidth as multiple computers.
On the other end of that spectrum, they offer a 6-port ethernet modem which will route a local network of up to six machines. That’s probably a great idea for small businessess, like a real estate agency, who have a few computers but no tech savvy staff members. It’d be a really silly choice for just about anyone else.
No, thanks. I’ll take the 1-port ethernet modem and then connect it to my own multi-port router with wifi. While having ethernet ports available can come in very handy once in a while, the practical matter is no one really wants winding cables all over their apartment, home, or business. What an unsightly mess. For less than 100 bucks, you can pick up a great wireless router and join those of us living in the present.
So, why would I sign a two or three year contract? I wouldn’t. “Free installation” is not enough of a cost to justify my losing the opportunity to re-assess the best deal next year. It might be that cable companies finally start offering 4-6Mbps for 25 euro as they do in some countries, in which case I’d want to switch.
But I understand the offer. Not all buyers will analyze things the way I have. Instead, they’ll focus only on their immediate out-of-pocket costs and thus lock themselves into an arrangement just to save a couple bucks up front. I can understand Romtelecom’s desire to lock-in as many customers as possible.
Afterall, the cable companies will have to respond in some way during the next year or two. They might wait a while to assess how successful Romtelecom’s new offers are, but they won’t wait forever. Right now, cable no longer offers the best value for your money and anyone not locked into a contract should think about changing.
RDS is popularly considered the worst possible service provider, with renown failures to adequately deliver the bandwidth they promise. They recently opened up a new office just around the corner from my block, which would make paying convenient. (Americans: you cannot pay bills online or even by mail, but must show up in the flesh and fight the crowds in order to clear your account.)
But, all the same, no thanks. RDS currently charges 19,5€ for a 1Mbps connection, whereas you can get time and a half speed for the same price from Romtelecom.
Then you’ve got Astral, the cable provider considered to be good quality. However, they seem to be embarrassed about their prices. They’ve hidden all discussion of price so you cannot know what the cost is. A quick googling finds one website declaring Astral charges 23€ for a pathetic 128kbps dribble.
That couldn’t possibly be right. I remember last year’s discussion about the exciting BPL developments in Romania wherein a number of kindly folks tried to explained to me that Astral was offering 1.5Mbps for 23€. In fact, back then Astral used to actually list their prices online. Maybe not on the English portion of their website, but at least in the romaneşte.
Now? Nothing. I wonder if they’ve been increasing prices for all new customers. That might explain why they would be embarrassed to show prices on their website. Astral was bought by UPC and the parent company UPC has it’s own Romanian website which also hides the prices.
The intrepid link hacker will press onward to exhaust all possibilities, search every possible nook and cranny until the clam is forced open and the pearl revealed. Aşa e, nu? And so it is that we eventually discover an obscure page with prices on it where we find UPC is charging over 27€ for 1.5Mbps which is roughly 50% more than Romtelecom.
It stands to reason this is probably Astral’s price for new customers as well, which would explain their unwillingness to openly display prices. Or, at least, that makes more sense than the only other explanation of UPC charging different prices for the same service just because the brand name was different. On the other hand, a recent survey of cable providers in Romania says that Astral is actually charging 31,5€ for 1.5Mbps service.
Yet things get even more interesting.
Not long after I received that happy litlte brochure with it’s significantly lower prices, I received a separate letter in the mail from Romtelecom again. Instead of being another invoice, this was a simple announcement to let people like me — you know, the suckers who fork out big bucks for the best connectivity available — know Romtelecom is going to be upgrading their premium 100€ service to double the bandwidth at 4Mbps.
Hooo doggy! Somebody catch me while I faint.
I mean, by gosh by golly, that there 4Mbps is dern near the normal speeds much of the outside world receives. It’s liable to make a feller happy as a pig in shit, I tell you whut. Granted, back in the states, I’d be pulling down at least 6Mbps if not 8Mbps. But 4Mbps is nothing to sneeze at either, even if the Romanian upload speeds continue to be a complete and utter crock.
So, what’s a guy to do? Take a very small bump in the speed he’s pretended to get used to, while pocketing a sizeable chunk of change? Or keep burning the wallet at both ends, finally reaching a speed that really begins to feel almost normal? Lemme know, y’all, cuz I’m powerful confused…
