Eastern Europe: Digital Leader of the Emerging World

Euromonitor International’s latest strategy briefing “Digital Landscape: Eastern Europe Leads the Emerging World in Digital Services” highlights the digital advancement across a region that is home to some of the most advanced telecom networks among emerging nations. Countries in Eastern Europe built their digital networks from scratch in the early 1990s and over the years, robust fixed-line services and fibre investments have resulted in high broadband speeds. Though the region has a traditional strength in fixed-line services, mobile is fast emerging as the medium that consumers are leveraging for various digital services. Operators have moved decisively towards 4G LTE and 5G trials are being planned. While this has opened up opportunities in digital commerce, concerns about online security persists.

Below are the five key findings of the strategy briefing:

  • Eastern Europe has the strongest fixed-line networks in the emerging world with a high proportion of fibre connections. Romania stands as an example of community fibre networks that were implemented in the early 1990s and has been expanded since, thereby yielding some of the highest broadband speeds globally.
  • With data demand rising rapidly, investments in high-speed cellular broadband has progressed at a fast pace in recent years. Fixed-to-mobile substitution has continued among a significant proportion of consumers with the region expected to witness improvements in mobile connectivity over the forecast period, thereby driving data usage.
  • The region is emerging as a hub for digital proximity purchases, especially Poland which is a burgeoning market for contactless payments. However, cash usage remains high which presents challenges for expansion of digital transactions.
  • Countries in the region have ageing consumers who are difficult to reach and report lower usage and awareness of digital technologies. Moreover, concerns about online security and privacy are lingering issues in the region though the European Digital Agenda has stressed on secure online transactions as a key priority.
  • Russia, Poland and Hungary are the regional markets with the highest digital potential. Despite recent economic turmoil, Russia is the largest market in the region and provides immense scope in digital commerce. Both Poland and Hungary are regional trendsetters in 4G LTE penetration with the latter witnessing a high proportion of online purchases, especially in consumer electronics.