The fixed-line markets of Central and Eastern Europe (Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia) contracted slightly in 2004. According to IDC, the number of fixed-line connections dwindled in 2004 by a 0.5% YTY to 32.88 mln and total telephony spending fell by 0.83% to $8.04 bln. Although mobile substitution continues apace and is the primary reason for the decline of the fixed-line telephony market, VOIP has also played a significant role, though its full effect will not be realized for several years.
Spending by both residential and business customers shrunk in 2004. While total residential spending on telephony contracted by less than a half%, on voice calls, spending fell by nearly 5% compared to 2003. By contrast, in the business sector, spending slipped by 1.3% on total telephony and 3.6% on calls. In terms of traffic, in 2004, only Poland and Bulgaria saw an increase in the total number of minutes, by 1.4% and 0.8% respectively. In every other country covered in IDC's study, there were fewer telephony minutes than in the previous year, with traffic in the Czech Republic out in front with a 14.5% plunge in the total number of minutes.
The country with the largest population, Poland, also had the largest telephony market in 2004, accounting for 37.7% of connections in the region. Romania was a distant second with 13.4%. At third with 11.0%, Hungary edged out the Czech Republic, which was fourth with 10.5%. In terms of spending, Poland led the region with just over 40% of the total in 2004. Hungary was second with 13.5% and the Czech Republic was third with just under 12%.