Quantitative Research The Market of Internet Access Services

Quantitative Research The Market of Internet Access Services Business Sample Report prepared for: December 2006 - January 2007

CONTENTS General Framework and Objectives pag. 3 Research Methodology pag. 4 Socio-Demographic Profile of the Sample pag. 6 RESEACH REPORT I. Degree of Penetration of Internet Access Services Inside Companies and Institutions pag. 8 II. Degree of Penetration of Data Transmission Services Inside Companies and Institutions pag. 13 III. Endowment of Companies and Institutions with PCs and Computer Networks pag. 17 IV. Types of Internet Access Connections pag. 30 V. Expenses with Internet Access Services pag. 40 VI. Purposes for Using the Internet and Use Policies pag. 46 VII. The Market of Internet Dial-Up Access Connections pag. 54 a. Description of Dial-up Access Connections and Their Degree of Use pag. 55 b. The Degree of Satisfaction with Providers of Dial-Up Internet Access Services pag. 65 c. Intentions to Change Providers or Types of Dial-up Internet Access Connections pag. 72 VIII. The Market of Dedicated Internet Access Connections pag. 82 a. Description of Used Dedicated Access Connections and Their Degree of Use pag. 83 b. Degree of Satisfaction with Dedicated Internet Access Providers pag. 96 c. Intentions to Change Providers or Types of Dedicated Internet Access Connections pag. 108 IX. Existence of Previous Internet Access Connections inside Companies and Institutions pag. 117 X. Intention to Acquire a New Internet Access Connection pag. 126 XI. Profile of the Companies and Institutions in Which Internet Access Services Are Used pag. 134 2

GENERAL FRAMEWORK AND OBJECTIVES During the period October 2006 January 2007, The Gallup Organization Romania made a research which subscribes to ANRC s aim to monitor the tendencies in the behavior related to the use of Internet access services in order to analyze the changes in the structure and operation of the specific and relevant retail markets identified by ANRC. The objectives of this research were: percentage of consumers and the degree of using Internet access services at the companies level used providers of internet access services and barriers/reasons for changing the provider used internet access services and selection criteria monthly average expenses with such services the degree of acquaintance with the types of internet access services domains and habits for using internet services degree of satisfaction with the used internet access services intention to change the used services connection modality, bandwidth, reasons response to a price or tariff increase 3

RESEARCH METHODOLOGY Researched Collectivity: active companies from Romania (which submitted their accounting balance sheet for 2005 and which have a turnover>0 RON) and public institutions. Total Volume of Collectivity: 394,581 companies and institutions (376,611 companies and 17,970 public institutions). Sampling Unit: a person from the management, who is in charge with making the decision regarding the acquisition of Internet access services. Sampling Volume: 1,078 companies and institutions using Internet access services. Sample Type: a probabilistic, stratified sample. Sampling: a representative sample built by using two stratification criteria: number of employees and turnover for 2005. The sample was constructed upon the basis of the statistical data provided by the Chamber of Commerce and Industry of Romania. The stratification process generated 25 cells. For each cell, a number of companies and institutions was selected at random, which number was high enough to reach the volume of the proposed volume of the sample of users. Companies were selected in two stages: in the fist stage, two filters were applied to the database of the Finance Ministry which includes the companies from Romania, which filters comply with the sampling criteria, and in the second stage a number of companies three times higher than quota set for each cell was extracted. In the case of public institutions, the selection was simple, at random, with no previous stratification of the database. All the selected companies and institutions had fixed telephone posts. Field inquiry: November 8 December 15, 2006. 4

RESEARCH METHODOLOGY For making this research, a representative sample was constructed at the level of the companies; through filtering such sample, the final sample of Internet users was obtained. The representative sample was used to obtain data regarding the penetration of Internet access services at the level of the entire collectivity. The sample of users was used to obtain data responding to the other objectives of the research. Interviews were conducted via the telephone, based on a standard questionnaire, applied by the interview operators specifically trained in this regard. The average duration of an interview was 8 minutes. The response rate for eligible companies (which meet the sampling criteria): Contacted companies of which: - inexistent number/private residence - refusal of selection questionnaire - ineligible companies (exceeded quota) Eligible Companies - person in charge could not be contacted - refusal of main questionnaire - no Internet Valid Main Questionnaires Response Rate for Main Questionnaire 5974 339 1549 2054 2032 62 250 642 1 078 53% This report, in a graphic format, presents the main results of this research. 5

SOCIO-DEMOGRAPHIC PROFILE OF THE SAMPLE (N=2032) Number of employees N % Areas N % 1-2 employees 934 46,0 NORTH-EAST 270 13,3 3-9 employees 696 34,3 SOUTH-EAST 223 11,0 10-49 employees 305 15,0 SOUTH 138 6,8 50-249 employees 77 3,8 SOUTH-WEST 113 5,6 250+ employees 20 1,0 WEST 236 11,6 NORTH-WEST 379 18,7 CENTRE 258 12,7 Revenues in 2005 N % BUCHAREST 415 20,4 Public institution 76 3,7 under 50.000 Euro 1280 63,0 50.000-100.000 Euro 230 11,3 100.001-500.000 Euro 288 14,2 500.001-1 mil. Euro 63 3,1 over 1 mil. Euro 95 4,7 *2005 average exchange rate is the reference: 1 Euro = 3,62 RON Type of activity (CAEN) N % Public institution 76 3,7 Agriculture and forestry 28 1,4 Industry 284 14,0 Constructions 181 8,9 Trade 578 28,4 Services 834 41,0 Unspecified 51 2,5 6

RESEARCH REPORT

I. Degree of Penetration of Internet Access Services Inside Companies and Institutions

Degree of Penetration of Internet Access Services Inside Companies and Institutions 67% of the companies and institutions from Romania use Internet access services. The larger are the companies and institutions, the higher gets the penetration degree in using Internet access services, reaching 99% for the companies and institutions with more than 50 employees, and 95% for the public institutions and companies with a turnover in excess of EUR 1 million. Small companies (1-2 employees and a turnover below EUR 50,000) have the lowest penetration degree of using Internet access services, approximately 55%. When making an analysis per development regions, we note that there are significant variations of the penetration rate of using [Internet access services] from region to region. The companies and institutions from Bucharest and from the South [of Romania] have the highest penetration degree of using (75%, respectively 72%), while regions as South-West and West have a penetration rate below the average (60%, respectively 62%). Extrapolating this result to the collectivity subject to our research (active companies from Romania, which submitted their balance sheet for 2005 and have a turnover>0 RON, and public institutions), the result is that Internet access services are used in approximately 265,948 companies and institutions 9

The penetration rate of Internet access services at business and consumer level Does your company use Internet services paid by the company? Base: Representative sample for companies and institutions, N =2032 NO it doesn't use, 33% YES, it uses Internet services paid by the company, 67% *62 companies that didn t answer the question were excluded 10

The penetration rate of Internet access services by number of employees and turnover Does your company use Internet services paid by the company? Base: Representative sample for companies and institutions, by number of employees and turnover 1-2 employees (N=899) 55.2% No. of employees 3-9 employees (N=669) 10-49 employees (N=305) 72.3% 82.6% 50+ employees (N=97) 99.0% Public institutions (N=64) 95.3% under 50 thousands Euros (N=1234) 57.6% Turnover in 2005 50-100 thousands Euros (N=227) 100-500 thousands Euros (N=287) 501 thousands - 1 milion Euros (N=63) over 1 million Euros (N=95) 76.7% 83.3% 84.1% 94.7% *62 companies that didn t answer the question were excluded 0% 20% 40% 60% 80% 100% 11

The penetration rate of Internet access services by development areas Does your company use Internet services paid by the company? Base: companies and institutions from the following development areas NORTH-EAST (N=263) 62.4% SOUTH-EAST (N=218) 64.7% SOUTH (N=134) 72.4% SOUTH-WEST (N=102) 59.8% WEST (N=227) 61.7% NORTH-EEST (N=370) 67.3% CENTER (N=246) 69.1% BUCHAREST (N=410) 74.6% 0% 20% 40% 60% 80% 100% *62 companies that didn t answer the question were excluded 12

II. Degree of Penetration of Data Transmission Services Inside Companies and Institutions

Degree of Penetration of Data Transmission Services Inside Companies and Institutions Only 12% of the companies and institutions from Romania use also data transmission services, generally to ensure a permanent and secured connection between branches, respectively headquarters. The larger are the dimensions of a company, the higher gets the penetration degree of using data transmission services, reaching almost 43% for the companies and institutions with more than 50 employees and 34% for the companies with a turnover in excess of EUR 1 million, respectively 31% for public institutions. Small companies (1-2 employees and a turnover below EUR 50,000) have the lowest penetration [rate] of using data transmission services, below 6%. 14

The penetration rate of data transmission services at companies and institutions level Does your company use data transmission services besides the Internet (offered by a supplier, usually to ensure a permanent and secure connection to affiliates/headquarters? Base: representative sample of companies and institutions, N =2032 YES, it uses data transmission services payed by the company, 12% NO it doesn't use, 88% *146 companies that didn t answer the question were excluded 15

The penetration rate of data transmission services by number of employees and turnover Does your company use data transmission services besides the Internet (offered by a supplier, usually to ensure a permanent and secure connection to affiliates/headquarters? Base: representative sample of companies and institutions, by number of employees and turnover 1-2 employees (N=900) 3.6% No. of employees 3-9 employees (N=630) 10-49 employees (N=267) 14.3% 21.3% 50+ employees (N=89) 42.7% Public institutions (N=58) 31.0% under 50 thousands Euros (N=1207) 5.9% Turnover in 2005 50-100 thousands Euros (N=213) 100-500 thousands Euros (N=258) 501 thousands - 1 milion Euros (N=58) over 1 milion Euros (N=92) 15.5% 19.4% 24.1% 33.7% *146 companies that didn t answer the question were excluded 0% 20% 40% 60% 80% 100% 16

III. Endowment of Companies and Institutions with PCs and Computer Networks

Endowment of Companies and Institutions with PCs and Computer Networks The companies and institutions in which there is an Internet access connection have an average number of 7 computers. The number of computers is closely related to the number of employees, so that in the case of companies and institutions with 3-9 employees there are 4 computers on the average, and in the case of the companies and institutions with more than 50 employees, the number of computers may reach 36. Among the companies and institutions in which there is an Internet access connection, 69% have a computer network; this percentage varies again according to the number of employees. In this way, only 55% of the companies and institutions with 1-2 employees in which there is an Internet access connection have a computer network, while in the case of the companies and institutions with more than 50 employees, the percentage of those having their computers connected in a network grows to 95%. The average number of computers connected to a network is 8, a number which increases at the same time with the company size, from 3 (companies and institutions with 1-2 employees) to 33 (companies and institutions with more than 50 employees). Generally speaking, 80% of the computers existing in companies and institutions are connected in a network. The type of network through which such computers are connected is, in most of the cases, a Local Network LAN (86%), then a Metropolitan Network MAN (7%) and a Network between the central headquarters and subsidiaries - WAN (3%). On the average, 5 computers from a company or institution have Internet access, this number going to 25 computers in the case of the companies with more than 50 employees. 18

Endowment of Companies and Institutions with PCs and Computer Networks On the average, 75% of the computers in the companies and institutions with Internet access are connected to the Internet; this percentage varies according to the number of the employees of the company and institution, decreasing as the number of the employees decreases. This phenomenon is valid also upon analyzing the percentage of employees with Internet access from the total number of employees of the companies, respectively institutions. On the average, only 29% of their employees have Internet access; this percentage varies greatly according to the size of the company and institution, from 97% in the case of those with 1-2 employees to 18% in the case of those with more than 50 employees. 19

The total number of computers used in companies and institutions that have Internet connection How many computers (including servers) do you currently use in your company? Please take account all offices that your company has in Romania, including affiliate offices, branches etc. Base: companies and institutions that have Internet connection, on total sample and by number of employees 1-2 3-5 6-10 11-20 21-50 over 50 DK/NA Average number Total sample (N=1078) (companies and institutions that have Internet connection) 44 32 12 5 4 21 6,81 1-2 employees (N=336) 73 23 2 1 2,20 3-9 employees (N=408) 40 41 14 2 11 3,83 10-49 employees (N=252) 24 34 21 13 7 1 8,24 50+ employees (N=82) 6 13 20 15 26 18 2 36,49 0% 20% 40% 60% 80% 100% 20

The presence of a computer network How many computers (including servers) that your company uses are connected to a local network and how many are individual computers, are not connected to a network? Base: companies and institutions that have Internet connection, on total sample and by number of employees There is a local network There isn't a local network DK/NA Total sample (N=1078) 68.6% 30.9%.6% (companies and institutions that have Internet connection) 1-2 employees (N=336) 55.1% 44.6%.3% 3-9 employees (N=408) 67.4% 31.6% 1.0% 10-49 employees (N=252) 79.8% 20.2% 50+ employees (N=82) 95.1% 3.7% 1.2% 0% 20% 40% 60% 80% 100% 21

The number of computers connected to a network How many computers (including servers) that your company uses are connected to a local network and how many are individual computers, are not connected to a network? Base: companies and institutions that have Internet connection and a computer network, on total sample and by number of employees 2-3 4-5 6-10 11-20 21-50 over 50 DK/NA Total number of companies and institutions that have a network 53 16 15 6 5 2 5 Average number 7,93 1-2 employees (N=185) 85 7 3 1 4 2,71 3-9 employees (N=275) 54 23 16 12 5 4,23 10-49 employees (N=201) 36 18 21 14 7 1 8,50 50+ employees (N=78) 14 8 18 12 24 17 8 32,83 0% 20% 40% 60% 80% 100% 22

Percent of computers connected to a network of total number of computers form companies and institutions How many computers (including servers) do you currently use in your company? How many computers (including servers) that your company uses are connected to a local network and how many are individual computers, are not connected to a network? Base: companies and institutions that have Internet connection, on total sample and by number of employees Total Sample (N=1078) (companies and institutions that have Internet connection) 79,7% 1-2 employees (N=336) 3-9 employees (N=408) 10-49 employees (N=252) 68,6% 75,0% 82,2% 50+ employees (N=82) 83,1% 0% 20% 40% 60% 80% 100% 23

The type of network used to connect computers in companies and institutions What type of network do your computers use for connections in your company? Base: companies and institutions that have Internet connection and a computer network, N=739 LAN - Local Area Network 86% WAN - Wide Area Network between HQ and branches 3% MAN - Metropolitan Area Network 7% Other 1% DK/NA 6% Multiple answer question 24

The type of network used to connect computers in companies and institutions What type of network do your computers use for connections in your company? Base: companies and institutions that have Internet connection and a computer network, N=739 only local network (LAN), 83% only network between HQ and branches (WAN), 2% only metropolitan network (MAN), 5% DK/NA, 6% local + network between HQ and branches, 1% local + metropolitan, 2% Other, 1% 25

The number of computers with Internet access What is the approximate number of computer with Internet access in your company? Please take into account all your offices in Romania, including HQ and branches. Base: companies and institutions that have Internet connection, on total sample and by number of employees 1-2 3-5 6-10 11-20 21-50 over 50 DK/NA Average number Total sample (N=1078) (companies and institutions that have Internet connection) 58 23 9 4 3 12 5,1 1-2 employees (N=336) 80 16 12 1,84 3-9 employees (N=408) 57 30 10 1 2,99 10-49 employees (N=252) 41 25 16 12 4 0 6,64 50+ employees (N=82) 18 13 17 11 26 11 4 24,63 0% 20% 40% 60% 80% 100% 26

Percent of computers with Internet access of total number of computers form companies and institutions How many computers (including servers) do you currently use in your company? What is the approximate number of computers with Internet access in your company? Base: companies and institutions that have Internet connection, on total sample and by number of employees Total sample (N=1078) (companies and institutions that have Internet connection) 75.3% 1-2 employees (N=336) 3-9 employees (N=408) 10-49 employees (N=252) 78.3% 84.0% 82.3% 50+ employees (N=82) 66.8% 0% 20% 40% 60% 80% 100% 27

Percent of employees with Internet access of total number of employees form companies and institutions What is the approximate number of employees that have Internet access in your company? Base: companies and institutions that have Internet connection, on total sample and by number of employees Total sample (N=1078) (companies and institutions that have Internet connection) 29.1% 1-2 employees (N=336) 96.9% 3-9 employees (N=408) 71.4% 10-49 employees (N=252) 44.6% 50+ employees (N=82) 17.9% 0% 20% 40% 60% 80% 100% 28

Percent of employees that have a personal email account of total number of employees form companies and institutions What is the approximate number of employees that have a personal email account in your company? Base: companies and institutions that have Internet connection, on total sample and by number of employees Total sample (N=1078) (companies and institutions that have Internet connection 24.4% 1-2 employees (N=336) 91.4% 3-9 employees (N=408) 62.0% 10-49 employees (N=252) 36.1% 50+ employees (N=82) 14.9% 0% 20% 40% 60% 80% 100% 29

IV. Types of Internet Access Connections

Types of Internet Access Connections 36% of the companies and institutions with Internet access use a dial-up connection, mostly through a fixed telephone line (28%), and to a smaller extent through a mobile access ZAPP (4%) and ISDN line (4%). 67% of the companies and institutions with Internet access use a dedicated connection, mostly through fiber optic (25%) and TV cable (23%). The xdsl dedicated connection is only used by 9% of the companies and institutions. The higher the number of employees, slightly higher is also the percentage of dial-up connections through a traditional telephone line, but the percentage of using the CDMA mobile connection is lower. In the same context, at the companies and institutions with a dedicated connection, as their employees number increases, one can note a tendency of giving up the cable connection in favor of the fiber optic. In the case of companies and institutions with more than 50 employees, such tendency is obvious: 10% have a dedicated TV cable connection and 43% have a fiber optic connection. As a provider of dial-up connections, Romtelecom is present in 63% of the companies and institutions with this type of connection, followed by Zapp with 13% and RCS/RDS with 11%. The main provider for the companies and institutions that use the dial-up connection on a mobile line is Zapp with 67%, followed by Vodafone with 19%. As a provider of dedicated connections, RCS/RDS is present in 29% of the companies and institutions with this type of connection, followed by UPC (Astral) with 17% and Romtelecom with 12%. On the market of dedicated connections through TV cable, RCS/RDS and UPC (Astral) are the main providers for the companies and institutions that use this type of connection (41% RCS/RDS, respectively 35% UPC(Astral). The main provider for the companies and institutions that use the dedicated connection through fiber optic is RCS/RDS with 31%, followed by UPC (Astral) with 12%. 31

Types of Internet connections used in companies and institutions What type of Internet connection(s) are used in your company? Please leave out data transmission services i.e. services offered by a carrier (via VPN, rented lines) and usually used for data transmission among branches without Internet surf access. Base: companies and institutions that have Internet connection, N=1078 DIAL-UP CONNECTION Fixed phone line ISDN line Mobile access via GSM-CSD/GPRS/WAP Mobile access via CDMA/EVDO (Zapp) Mobile access via EDGE/3G 4.0% 1.8% 4.4% 0.6% 27.5% 36.0% DEDICATED CONNECTION TV cable Optical fiber xdsl(adsl, SDSL, HDSL) Radio (radio modem or microwave) Satelite UTP/FTP cable (via neighborhood network) Other 9.4% 3.2% 0.4% 6.2% 1.8% 22.6% 24.9% 67.0% Multiple answer question 32

Types of Internet connections used in companies - by size of the company - What types of Internet connections does your company use? (multiple question answer) 1-2 employees (N=336) 3-9 employees (N=408) fixed phone line 23% fixed phone line 27% ISDN line 4% ISDN line 4% Mobile GSM-CSD/GPRS/WAP 2% Mobile GSM-CSD/GPRS/WAP 2% Mobile CDMA/EVDO (Zapp) 5% Mobile CDMA/EVDO (Zapp) 5% Mobile EDGE/3G % Mobile EDGE/3G 1% TV cable 27% TV cable 24% Optical fiber 20% Optical fiber 24% xdsl(adsl, SDSL, HDSL) 9% xdsl(adsl, SDSL, HDSL) 9% Radio 3% Radio 2% Satelite 0.3% Satelite % UTP/FTP 9% UTP/FTP 6% Other 2% Other 2% 33

Types of Internet connections used in companies and institutions - by size of the company - What types of Internet connections does your company use? (multiple answer question) 10-49 employees (N=252) 50+ employees (N=82) fixed phone line 34% fixed phone line 32% ISDN line 3% ISDN line 5% Mobile GSM-CSD/GPRS/WAP 1% Mobile GSM-CSD/GPRS/WAP 5% Mobile CDMA/EVDO (Zapp) 4% Mobile CDMA/EVDO (Zapp) 1% Mobile EDGE/3G 1% Mobile EDGE/3G 1% TV cable 19% TV cable 10% Optical fiber 26% Optical fiber 43% xdsl(adsl, SDSL, HDSL) 11% xdsl(adsl, SDSL, HDSL) 6% Radio 4% Radio 9% Satelite 0.4% Satelite 1% UTP/FTP 3% UTP/FTP 4% Other 2% Other 2% 34

For how long have the companies and institutions been using their connection Since when has the company been using each type of Internet connection that you have mentioned? Base: Companies that have dial-up Internet connections (N=388), respectively dedicated (N=722) Companies that have dial-up connection* 12% 17% 30% 28% 6% Before 2003 2004 2005 2006 Companies that have dedicated connection* 13% 13% 33% 29% 6% DK 0% 20% 40% 60% 80% 100% *In the case of several dial-up connections, respectively dedicated, the oldest connection has been taken into account 35

The market structure by the number of accounts and Internet ports How many Internet dial-up accounts does your company use? How many dedicated Internet ports does your company have? Number of dial-up accounts Number of dedicated Internet ports At least four, 2% Three, 4% DK/NA, 28% One, 60% DK/NA, 37% One, 43% Two, 6% At least four, 7% Three, 3% Two, 10% Base: Companies and institutions that have dial-up connection, N = 388 Base: Companies and institutions that have dedicated connection, N = 722 36

Internet access service suppliers - by connection type - Who are your current Internet suppliers for each type of existing connections in your company (including connections which are offered for free as part of a mobile phone subscription)? (open question with multiple answer) DIAL UP DEDICATED Romtelecom/Artelecom 63% RDS-RCS 29% Zapp 13% RDS-RCS 11% UPC(Astral) 17% UPC(Astral) 4% Romtelecom/Artelecom 12% Vodafone(Connex) 3% Xnet 1% Euroweb 1% Orange 1% Other suppliers* 31% Other suppliers* 5% DK/NA 7% * Mentions under 1% DK/NA 13% * Mentions under2% Base: Companies and institutions that have dial-up connection, N = 388 Base: Companies and institutions that have dedicated connection, N = 722 37

Internet access service suppliers -by dial-up connection - Who are your current Internet suppliers for each type of existing connections in your company (including connections which are offered for free as part of a mobile phone subscription)? Fixed phone line Mobile access Romtelecom/Artelecom 72% Zapp 67% RDS-RCS 13% UPC(Astral) 4% Vodafone 19% Xnet 2% Orange 6% Zapp 1% Others 4% Other suppliers 4% DK/NA 7% DK/NA 6% Base: Companies and institutions that have a dial-up connection through a fixed phone line, N = 296 Base: Companies and institutions that have a dial-up connection through mobile access, N = 70 38

Internet access service suppliers -by dedicated connection- Who are your current Internet suppliers for each type of existing connections in your company (including connections which are offered for free as part of a mobile phone subscription)? TV Cable Optical fiber RDS-RCS 41% RDS-RCS 37% UPC(Astral) 12% UPC(Astral) 35% Euroweb 1% Other suppliers 18% Other suppliers 37% DK/NA 6% DK/NA 12% Base: Companies and institutions that have a dedicated connection through TV Cable, N = 244 Base: Companies and institutions that have a dedicated connection through optical fiber, N = 268 39

V. Expenses with Internet Access Services

Expenses with Internet Access Services Almost half (44%) of the companies and institutions spend below RON 100 per month on the average for the payment of subscriptions for Internet access services. In the last month, the average amount spent by companies and institutions with dial-up Internet access services was RON 163, and with dedicated Internet access services it was RON 256. The average amount paid by companies and institutions for the Internet access services in one month is RON 233. The monthly average expenses related to Internet access services are significantly higher for the companies and institutions with more than 50 employees (RON 698) and significantly lower for the companies with 1-2 employees (142 RON). When classifying the companies according to their turnover, one can note that a higher income of the company generates higher expenses with Internet access services, from RON 162 for the companies with a turnover below EUR 50,000 to RON 532 for the companies with a turnover in excess of EUR 1 million. Public institutions spend an average of RON 453 for Internet access services. 41

Total monthly expenses with Internet access services What is the approximate amount that your company paid for all used Internet services, irrespectively of the type of connection, over the last month (excluding phone minutes for dial-up access) (RON, including VAT)? Base: Companies and institutions that have Internet access, N=1078 The average amount paid over the last month: 232,6 RON 40% 20% 21% 23% 15% 20% 6% 5% 3% 5% 4% 0% 50 RON or less 51-100 RON 101-200 RON 201-300 RON 301-400 RON 401-500 RON 501-999 RON at least 1000 RON DK/NA 42

The average amount spent over the last month with Internet access What is the approximate amount that your company paid for all used Internet services, irrespectively of the type of connection, over the last month (excluding phone minutes for dial-up access) (RON, including VAT)? Base: sample of companies and institutions, by number of employees and turnover No. of employees 1-2 employees [N=258] 3-9 employees [N=312] 10-49 employees [N=179] 50+ employees [N=40] 142.2 RON 187.0 RON 338.2 RON 698.4 RON average amounts Turnover in 2005 Public institution [N=33] under 50.000 Euros [N=432] 50.000-100.000 Euros [N=105] 100.001-500.000 Euros [N=141] 500.001-1 mil. Euros [N=33] over 1 mil. Euros [N=45] 452.5 RON 162.4 RON 250.6 RON 272.3 RON 294.5 RON 532.3 RON *289 respondents didn t declare what was the average amount spent over the last month with these services 43

The total monthly expenses with Internet dial-up connections What is the average amount that your company paid over a month for the Internet access through this connection? The sum must be in RON, including VAT but excluding the fixed/mobile telephony costs required to make the connection. Base: Companies and institutions that have Internet dial-up access, N=388 The average amount paid over the last month: 162,8 RON 40% 25% 29% 20% 16% 16% 5% 5% 1% 4% 0% 50 RON or less 51-100 RON 101-200 RON 201-300 RON 301-400 RON 401-500 RON 501-999 RON at least 1000 RON DK/NA 44

The total monthly expenses with dedicated Internet access What is the average amount that your company paid over a month for the Internet access through this connection? (RON, including VAT) If the Internet services are offered to you together with other services (cable TV, telephony), please take into consideration only the costs with the Internet access Base: Companies and institutions that have a dedicated Internet connection, N=722 The average amount paid over the last month: 256,4 RON 40% 20% 23% 20% 23% 13% 7% 5% 2% 4% 4% 0% 50 RON or less 51-100 RON 101-200 RON 201-300 RON 301-400 RON 401-500 RON 501-999 RON at least 1000 RON DK/NA 45

VI. Purposes for Using the Internet and Use Policies

Purposes for Using the Internet and Use Policies The main purpose for which Internet access services are used inside companies and institutions is to receive and send emails (in 97% of the companies and institutions). 76% of the companies and institutions use these services for Internet browsing, 58% for file downloading, while 31-32% use them for online transactions and for hosting WEB sites. Only in 12% of the companies are these services used for Internet telephony (VoIP). The degree of using Internet access services for email and Internet browsing does not differ very much according to the business field. Instead, in public institutions, these services are used in an extent significantly higher than in companies for hosting Websites and for file downloading. In 76% of the companies and institutions, there is no restriction or recommendation regarding the Internet use by employees with no management positions, with a slight decrease of this percentage in case of the companies with Internet access only through a dial-up connection (71%). In 5% of the companies and institutions, the access granted to this category of employees is only permitted during a certain hourly interval, in 3% of the companies and institutions, employees have access only to certain services, while in 2% employees have a maximum threshold for Internet traffic or hours. Restrictions regarding the use of Internet access services are applied in a lesser extent to the employees having management positions (only 6% of respondents state that there is some type of restriction in their company or institution). 47

The purpose of using Internet access in companies and institutions For what purposes does your company use the Internet? Base: Companies and institutions that have Internet access, N=1078 E-mail 97% Internet browsing 76% For transferring files 58% To host web pages 32% On-line transactions 31% E-commerce 17% For Internet telephony 12% Other 8% Multiple answer question 48

The purpose of using Internet access in companies and institutions by area of activity of the company For what purposes does your company use the Internet? Multiple answer question Base: Companies and institutions that have Internet access, by area of activity 99% 98% 96% 97% 95% 93% Public institution (N=53) 100% 77% 78% 77% 75% 71% 70% 74% Agriculture, forestry (N=14) Industry (N=164) Constructions (N=86) Commerce(N=280) 80% 59% 57% 57% 55% 49% Services (N=453) *28 companies had their area of activity not declared 60% 43% 36% 35% 32% 31% 33% 29% 28% 29% 30% 40% 23% 21% 20% 18% 18% 15% 9% 9% 12% 12% 13% 6% 14% 9% 9% 8% 7% 4% 20% E-mail Internet browsing For transferring files To host web pages On-line transactions E-commerce Internet telephony (VoIP or through VPN) Other 0% 49

Policies in companies and institutions regarding Internet use by non-managerial employees Which of the following statements best describes the policy of your company regarding Internet use by non-managerial employees? What about managers? Base: Companies and institutions that have Internet access, N=1078 There is no restriction regarding Internet access 76% Access allowed only at a certain time 5% Employees have access only to some services (e.g. only e-mail) 3% Employees have a limit to traffic or hours of access 2% Other situations 5% DK/NA 9% Multiple answer question 50

Policies in companies and institutions regarding Internet use by non-managerial employees Which of the following statements best describes the policy of your company regarding Internet use by non-managerial employees? What about managers? Base: Companies and institutions that have Internet access, by type of connection There is no restriction regarding Internet access 71% 79% 78% Access allowed only at a certain time Employees have access only to some services (e.g. only e-mail) Employees have a limit to traffic or hours of access 7% 4% 6% 3% 3% 3% 1% Companies that have only dial-up connection (N=356) Companies that have only dedicated connection (N=690) Other situations DK/NA 6% 4% 6% 10% 9% 9% Companies that have both type of connection (N=32) Multiple answer question 51

Policies in companies and institutions regarding Internet use by managers Which of the following statements best describes the policy of your company regarding Internet use by non-managerial employees? What about managers? Base: Companies and institutions that have Internet access, N=1078 There is no restriction regarding Internet access 82% Access allowed only at a certain time 2% Employees have a limit to traffic or hours of access 2% Employees have access only to some services (e.g. only e-mail) 1% Other situation 1% DK/NA 11% Multiple answer question 52

Policies in companies and institutions regarding Internet use by managers Which of the following statements best describes the policy of your company regarding Internet use by non-managerial employees? What about managers? Base: Companies and institutions that have Internet access, by type of connection There is no restriction regarding Internet access 79% 84% 84% Access allowed only at a certain time Employees have access only to some services (e.g. only e-mail) Employees have a limit to traffic or hours of access 4% 1% 3% 1% 1% 3% 3% 1% Companies that have only dial-up connection (N=356) Companies that have only dedicated connection (N=690) Other situations 1% 1% 3% Companies that have both type of connection (N=32) DK/NA 6% 12% 11% Multiple answer question 53

VII. THE MARKET OF INTERNET DIAL-UP ACCESS CONNECTIONS

VII.a. Description of Dial-up Access Connections and Their Degree of Use

Description of Dial-up Access Connections and Their Degree of Use Out of the total dial-up internet access connections, 74% are classic dial-up, 12% through CDMA, 9% through ISDN and 4% through GSM/GPRS/WAP and 1% through 3G/EDGE. 60% of the companies and institutions with a dial-up internet access connection have only one account. 76% of the companies and institutions with a dial-up internet access connection have an unlimited access subscription, while 14% have a limited access or partially limited access subscription..the average number of hours included in the subscription is 41.5%. Only 1% of the companies and institutions use cards, respectively access value cards. The larger is the company, the higher is the percentage of the people using an unlimited access subscription (90% of the companies and institutions with more than 50 employees in which there is a dial-up access connection). For the representatives of the companies and institutions, it was quite difficult to estimate the average monthly number of hours of using internet dial-up access services, almost 60% of them saying that they do not know such number. Among the companies and institutions that mentioned a number of hours, a little more than 50% use internet access services less than 50 hours a month, while 8% say they use such services more than 200 hours. The average number [of hours] of using internet access services in case of dial-up connections is 78. The average amount spent in the last month for dial-up internet access connections is RON153 for fixed classic connections, RON 203 for ISDN connections, and RON 132 for mobile connections. The average monthly expenses related to dial-up internet access connections are significantly higher for the companies with more than 50 employees (253 RON). 56

The market structure for dial-up connections by type of connection What type of Internet connection are used in your company? Base: total number of dial-up connections, N=407 Classic dialup, 74% ISDN, 9% GSM/GPRS/ WAP, 4% EDGE /3G, 1% CDMA, 12% 57

Number of dial-up Internet accounts How many Internet dial-up accounts does your company use? How many of those does the company pay for? Base: companies and institutions that have dial-up connection, (N=388) Number of dial-up accounts Number of paid dial-up accounts DK/NA, 28% DK/NA, 30% Three or more, 6% One, 60% Three or more, 6% One, 61% Two, 6% Two, 3% 58

Types of subscriptions to the dial-up Internet connections What type of subscription to the dial-up connection does your company have? Base: companies and institutions that have dial-up connection, (N=388) Unlimited subscription (unlimited access) 76% Limited hours or traffic subscription (limited access) Partially limited access subscription, with pay for additional time or MB 4% 10% Monthly average number of hours included in the subscription: 41,5 Card / pre-paid card 1% DK/NA 13% Multiple answer question 59

Types of subscriptions to the dial-up Internet connections - by size of the company - What type of subscription to the dial-up connection does your company have? Base: companies and institutions that have dial-up connection Unlimited subscription (unlimited access) Limited hours or traffic subscription (limited access) Partially limited access subscription, with pay for additional time or MB Card / pre-paid card Other DK/NA 1% 1% 4% 5% 3% 1% 13% 9% 8% 6% 14% 15.4% 8% 10% 70% 73% 81% 90% 1-2 employees (N=107) 3-9 employees (N=149) 10-49 employees (N=101) 50+ employees (N=31) Multiple answer question 60

Number of monthly used hours through the Internet dial-up connection* How many hours does the company use the dial-up connection in a usual month? Base: companies and institutions that have dial-up connection, (N=388) Don't know, not answering, 57% N=221 over 200 hours, 8% N=167 101-200 hours, 17% 10 hours or less, 20% They state a value, 43% 51-100 hours, 20% 11-30 hours, 21% 31-50 hours, 14% Average number of monthly used hours: 78 hours *if the company/institution has more than one dial-up connection, the question is asked for the most often used connection 61

Number of monthly used hours through the Internet dial-up connection by type of connection What type of Internet connection(s) are used in your company? How many hours does the company use the dial-up connection in a usual month? Base: companies and institutions that have dial-up connection* classic dial-up (N=142) 71,7 hours average values ISDN (N=11) 118,8 hours GSM- CSD/GPRS/WAP/EDGE/3G (N=2) 70,0 hours CDMA (N=12) 112,2 hours 0 50 100 150 200 *if the company/institution has more than one dial-up connection, the question is asked for the most often used connection For 221 connections, the number of monthly used hours with the services was not stated 62

The average amount spent over the last month with Internet dial-up services by type of connection How much do you pay on average each month for Internet access for this connection (RON, including VAT) Please do not include the telephony expenses required to make the connection. Base: dial-up connections used in companies and institutions from the sample, by their type Classic Dial up (fixed phone line) (N=216) 152.7 RON average amounts ISDN connection (N=30) 203.2 RON mobile connection GSM- CSD/GPRS/WAP(N=7) 175.0 RON mobile connection 3G/EDGE (N=2) 90.0 RON mobile connection CDMA (N=35) 126.3 RON 0 50 100 150 200 250 300 350 400 *for 117 connections the amount spent over the last month with the services was not stated 63

The average amount spent over the last month with Internet dial-up services by size of the company How much do you pay on average each month for Internet access for this connection (RON, including VAT) Please do not include the telephony expenses required to make the connection. Base: sample of companies and institutions, by size of the company 1-2 employees (N=78) 150.9 RON average amounts 3-9 employees (N=114) 162.7 RON 10-49 employees (N=69) 158.0 RON ` 253.2 RON 0 50 100 150 200 250 300 350 400 *113 respondents didn t declare what was the average amount that the company spent with these services over the last month 64

VII.b. The Degree of Satisfaction with Providers of Dial-Up Internet Access Services

The Degree of Satisfaction with Providers of Dial-up Internet Access Services The most important elements to be considered when selecting a provider of dial-up Internet access services are network availability and log-in time, quality of technical support and intervention time, and subscription price. Contract negotiability and promotional offers are the elements that count the least when selecting the provider of Internet access services. Generally speaking, 63% of the companies and institutions are satisfied or highly satisfied with dial-up internet access services; however, their satisfaction degree only reaches a rating of 3.7 on a scale from 1 to 5. RDS/RCS, UPC (Astral) and Vodafone report slightly higher ratings (provider ratings must be reservedly considered, due to the low number of users). When analyzing step by step the satisfaction with the quality of services provided, ratings and evaluations are similar. 66

100 80 60 40 20 0 The importance of criteria when choosing the Internet dial-up service that is currently used When you chose the dial-up Internet service that you currently use how important were the following criteria for you? % Base: companies and institutions that use Internet dial-up connection, N = 388 5,0 4,3 71% 4,1 4,0 65% 65% 3,8 3,7 3,8 3,8 58% 57% 57% 56% 55% 3,6 3,5 3,5 51% 51% 4,0 3,0 2,0 Top 2 Box (% important + very important) average values (1 = not at all important... 5 = very important) Network availability (not busy when connecting) and log in waiting time Quality of technical assistance services and emergency troubleshooting waiting time The price of subscription Existence and availability of customer service Reputation of supplier Level of protection against virus, spam, hacking Phone calls tariffs Installation costs Flexibility of pricing and conditions (they could be negotiated) Promotions 1,0 67

Overall satisfaction with dial-up Internet access suppliers Overall, how satisfied are your with your Internet dial-up suppliers? Please use a scale from 1 to 5 where 5 = very satisfied and 1 = not at all. Base: companies and institutions that have dial-up Internet from the respective suppliers 100% 80% 60% 40% [N = 407] [N = 242] [N = 16] [N = 18] [N = 40] [N = 48] [N = 43] 8 4 6 6 7 10 13 6 7 3 10 7 13 22 5 28 5 13 15 19 6 5 2 10 7 41 40 50 56 50 23 47 DK / NA Not at all satisfied 2 3 4 Very satisfied 20% 0% 22 20 25 17 28 35 12 All dial-up suppliers Romtelecom/ Artelecom UPC (Astral) Vodafone RDS-RCS Zapp Other suppliers 68

Overall satisfaction with dial-up Internet access suppliers average values (1=not at all satisfied...5=very satisfied) Overall, how satisfied are your with your Internet dial-up suppliers? Please use a scale from 1 to 5 where 5 = very satisfied and 1 = not at all. Base: companies and institutions that have dial-up Internet from the respective suppliers 5 [N = 407] [N = 242] [N = 16] [N = 18] [N = 40] [N = 48] [N = 43] 4 3.70 3.59 3.93 3.94 4.05 3.71 3.81 3 2 1 All dial-up suppliers Romtelecom/ Artelecom UPC (Astral) Vodafone RDS-RCS Zapp Other suppliers 69

Satisfaction with the quality of Internet dial-up services Using the same scale, how satisfied are you with the quality of service from these suppliers? Base: companies and institutions that have dial-up Internet from the respective suppliers [N = 407] [N = 242] [N = 16] [N = 18] [N = 40] [N = 48] [N = 43] 100% 80% 60% 40% 10 6 5 5 9 7 16 19 39 40 6 13 6 13 13 6 3 26 5 13 22 13 8 4 5 2 10 7 43 44 27 44 37 DK / NA Not at all satisfied 2 3 4 Very satisfied 20% 24 21 25 22 30 33 23 0% All dial-up suppliers Romtelecom/ Artelecom UPC (Astral) Vodafone RDS-RCS Zapp Other suppliers 70

Satisfaction with the quality of Internet dial-up services average values (1=not at all satisfied...5=very satisfied) Using the same scale, how satisfied are you with the quality of service from these suppliers? Base: companies and institutions that have dialup Internet from the respective suppliers [N = 407] [N = 242] [N = 16] [N = 18] [N = 40] [N = 48] [N = 43] 5 4 3.76 3.68 3.93 3.88 4.06 3.74 3.97 3 2 1 All dial-up suppliers Romtelecom/ Artelecom UPC (Astral) Vodafone RDS-RCS Zapp Other suppliers 71

VII.c. Intentions to Change Providers or Types of Dial-up Internet Access Connections

Intentions to Change Providers or Types of Dial-up Internet Access Connections The main barriers encountered when changing the provider or the type of dial-up Internet access connection are the lack of local alternative (39%) and the inertia generated by convenience (22%). Only 9% of the mentions relate to not knowing other offers. 19% of the companies and institutions that currently have a dial-up internet access connection declare their intention to give such connection up in the next 12 months. 69% of those intending to give up are using dial-up internet access services provided by Romtelecom, 14% -by Zapp and 10% - by RCS/RDS. The type of connection to be given up is primarily classic dial-up (82% of the mentions, although classic dial-up services represent only 74% of dial-up connections). The intention to give up is stronger in case of small companies (with 1-2 employees) than in case of large companies. 13% of the companies that have 1-2 employees and have a dial-up internet access connection state that they will absolutely give this connection up in the next 12 months, as compared to 0 large companies (more than 50 employees). The main reason for giving up dial-up connection is the downloading speed that does not meet the user s needs, followed by the high tariffs as compared to the quality of services and to the instability of the connection which closes down often. 73

Intentions to Change Providers or Types of Dial-up Internet Access Connections The increase in the subscription price generates an intention to change the provider or the type of connection in case of an important percentage of the companies and institutions, to be more exact between 20% and 41%, if we include both the categorical intention to change and the probable intention. Upon an increase by 5% of the price for the subscription for dial-up internet access services, almost 30% of the companies and institutions state that they are not affected and that they will take no action to change their provider, while 12% express their categorical intention to give up the connection they are currently using. Upon an increase by 10%, the percentage of the companies and institutions that are categorically stating that they would give up the dial-up access connection is 17%, such percentage reaching even 24% in case of an increase in the subscription price by 20%. To an approximately equal extent, those intending to give up will either choose another provider keeping the type of Internet access connection, or will choose a dedicated Internet access connection When the price of telephone calls tariffs for dial-up Internet access increases, 31% of the companies and institutions will choose a dedicated connection, 8% will choose a mobile dial-up connection, while 6% of the companies and institutions will definitively give up Internet access services.. 74

Difficulties in changing the dial-up Internet supplier You indicated that you were not satisfied with the services of your current Internet supplier(s). Why have not given up their services so far? Base: companies and institutions not satisfied with a dial-up Internet supplier, (N=116) I do not have an alternative in my area 39% Out of convenience 22% All suppliers have high tariffs The cost of switching is too high Not aware of other offers 11% 10% 9% All suppliers offer a low service quality It takes a long time to install a dedicated connection Other 3% 2% 5% DK/NA 14% Multiple answer question 75