NEW TREND TO WATCH IN POST-PANDEMIC ROMANIA: ROBOTICS

By Claudiu Vrinceanu

The global average is 74 industrial robots per 10,000 employees

As an example, the pandemic has generated a lot of demand for UiPath’s software robots to assist hospitals with processing medical tests. Health care is predicted to have a 36 percent automation potential. This means more than a third of health care tasks—especially managerial and back-office functions—could be automated, allowing providers to offer more direct, value-based patient care at lower costs and higher efficiency rates.

Also in the area of robotics, but this time the physical kind, we have the example of autonomous disinfection robots using ultraviolet light to disinfect large and crowded spaces. Normally, hospitals are very difficult to disinfect with traditional methods, so Romanian entrepreneurs have offered robots to hospitals in Bucharest. The technology used by the robot is effective in fighting bacteria, viruses, and other pathogens. The autonomous UVD disinfection robot, created by Bucharest Promo Robots, the first startup in Romania addressed to the humanoid service robots market, destroys up to 99.99 percent of resistant bacteria. “We are having discussions with the Romanian authorities. Together with the Support Association, we contacted representatives in the Internal Affairs Ministry’s Emergency Situations Department and offered to make the robot available in some of the Bucharest hospitals that were treating coronavirus cases,” said Ana-Maria Stancu, the CEO of Bucharest Promo Robots. The COVID-19 pandemic will accelerate new trends in Romanian business environment, including robotics. Whether we are talking about robotic process automation (RPA) or the automation of certain production processes, the post-COVID-19 reality in Romania will be based on new business models.

The COVID-19 crisis has also created the context for an increase in automation across Romania. The main arguments for automation start from the need for companies to protect their employees, so that they are less vulnerable, and are based on Europe’s intent to consolidate sustainably through local production facilities. What are the areas expected to see growth in the coming years? “First of all, robotics, especially in industries still lagging behind in terms of the adoption of robots, like the food, pharmaceutical, lighting industries,” said Costin Borc, Director for Central Europe at SNEF. For example, according to IMSAT Groupe SNEF, the development potential of projects with industrial robots is very high in Romania, which currently has 15 industrial robots per 10,000 workers, below the levels seen in Poland or Hungary. The global average is 74 industrial robots per 10,000 employees, according to the International Federation for Robotics. Therefore, in order to become more competitive at the European level, Romanian industrial producers need new investments and projects in automation and robotics.

Three strategies for tech trade in Europe: What Romania can learn

The tech industry is keeping jobs and business going, but it is also keeping trade going at this really difficult time for the economy. We can learn from other states when we’re considering the best ways to promote Romanian tech around the world and working with partners across the globe to really boost our presence in overseas markets where we know there’s a rapidly growing demand for IT services and products.

By Claudiu Vrinceanu

Whether it’s edtech, cybersecurity, medtech or fintech, there are some good practices available for governments willing to help founders get their products and services to global markets.

UK MODEL: FUTURE TECH TRADE STRATEGY One example of good practices for Romania comes from the United Kingdom, where The Department for International Trade (DIT) has launched the Future Tech Trade Strategy, a series of policies aimed at increasing tech trade with countries in the Asia Pacific region.

One new tool for firms is the Tech Exporting Academy, which will provide advice to companies to help them expand. This is a pro-bono service which will include information on regulation, compliance, legal, tax, and intellectual property. It will be carried out in partnership with professional services firms including Deloitte, KPMG, BDO, EY, and Clifford Chance. All of these consulting firms have offices in Bucharest as well, so the Romanian government could learn from this practice in order to help tech entrepreneurs, as well from the new DIT Platform that will help firms attend international industry events and investor meetings. This virtual events platform will include virtual trade shows and provide online buyer/seller meetings and company/investor introductions. Moreover, a Digital Trade Network is being set up by DIT and DCMS. £8 million will be invested in a network to help businesses internationalise, focusing on Japan, South Korea, Thailand, Singapore, Indonesia, and Australia. This will involve tech experts located in embassies and high commissions.

Japan is among the countries which will benefit by investments made in a network to help businesses go international

STARTUP SWEDEN: A BOOTCAMP PROGRAMME Another good example for Romania is Startup Sweden, a governmental initiative that accelerates the country’s most promising tech startups, helping them on their journey to enter the global market. Striving to create environments where business flourishes, the government offers several national and international activities —all tailored to support entrepreneurs. For example, the accelerator programmes are free of charge and open to tech companies across Sweden. During the Bootcamp, entrepreneurs will meet some 30 investors ranging from business angels to investors as well as leading tech media houses. What is new and important for Romanian authorities is the fact the Swedish government chooses entrepreneurs who have global ambitions and want to share their experiences and knowledge with others. THE NETHERLANDS LAUNCHES TECHLEAP. NL RISE UNDER THE TECHLEAP.NL PROGRAMME With this new programme, Techleap.nl and top entrepreneurs are helping the most promising scaleups in the Netherlands to grow faster internationally. What is relevant for the Romanian government is that the number of beneficiaries is very limited, with only 10 scaleups participating in the first batch. As part of the programme, entrepreneurs will be put on the international map with corporates, investors, and media. Founders are encouraged in groups of ten participants to also learn from each other about the challenges of scaling up a company. They receive support and feedback from top Dutch entrepreneurs who share their own insights and lessons learned with the new batch of promising scaleups. The Dutch government will help a new group of entrepreneurs every quarter.

2020 could see restart in Romania’s infrastructure projects despite pandemic

Romania has an historic problem in managing infrastructure projects, with long delays in signing contracts and difficulties in managing their implementation. But 2020 could be a turning point: a high number of contracts for motorways and express roads have already been signed, and state company CNAIR is preparing more major contracts for this year.

By Sorin Melenciuc

Road infrastructure is usually a long and highly bureaucratic process before the real start of construction takes place

If these projects are implemented, the next decade could forever change the way this eastern European nation looks and moves.

GRIM REALITY Romania currently has 866 kilometers of motorway, a very poor record at the European level, as many smaller countries have managed to build much larger networks of modern road infrastructure. Despite the growing public pressure and generous EU funds, the government has made little progress with infrastructure projects over the last few years. In 2019, only 43 km of new motorways were completed.

In fact, in 2020, the few motorway sections to be completed will bring little comfort to local and foreign drivers travelling around Romania. One of the main reasons for the slow advancement of major motorway projects in Romania is the poor management of state-owned road company CNAIR and the politically unstable position of the Transport minister.

One relevant example is the new A10 motorway, projected to connect southern and northern Transylvania and initially scheduled to be completed in 2016, is still under construction, with works due to be completed this year (according to the Transport Ministry) or in 2021 (according to NGOs).

Another significant aspect is the fact that Transylvania will still be cut off from the rest of Europe due to a 13 km interruption – a missing link between Banat and Transylvania that will not be finished until 2023, according to most independent experts. In fact, for this missing link, there is no official term of completion. The other major missing link, between Wallachia and Transylvania – the SibiuPitesti section – has even poorer perspectives: there is only one small section under construction, another with a signed contract and three other subsections – the most difficult ones – still not even contracted.

The Sibiu-Pitesti section is a difficult one as it crosses mountains, and experts forecast that this major project has little chance of being completed by 2030. But the worst situation in terms of infrastructure is in Moldova. Despite the fact that Parliament passed a law forcing the government to begin the construction of the Iasi-Targu Mures motorway, aiming to end the historical isolation of the province, the government has done little to speed up the project as it has no money to finance such expensive endeavours.

NEW MOMENTUM This year, as usual, the CNAIR management was changed, following the change of the country’s ruling party. This change has unexpectedly had some positive effects over the last couple of months, namely a surge in the company’s activity. Currently, 164 km of motorway and expressway are under construction in Romania, and at least 40 km will be completed this year.

However, what really has changed is project implementation. Road infrastructure is usually a long and highly bureaucratic process before the real start of construction takes place. To build a motorway section, you need a feasibility study, a technical project, and expropriations. These procedures were accelerated this year, with new contracts signed for construction, but also for studies and technical projects.

In fact, two new contracts were signed for the A3 motorway in Transylvania, as well as

one contract for a major section of the SibiuPitesti motorway. At the same time, more important contracts for other important road projects (e.g. the Pitesti-Craiova expressway) are in the final stages.

Major steps forward were also made for projects in Moldova, where three motorways (A7, A8 and A13) are planned. Contracts have been signed for feasibility studies for most of these roads, while expropriation procedures are more advanced than ever. Despite this progress, Romania also needs structural reforms to advance its infrastructure projects. Experts say that the missing link between Transylvania and Wallachia, the PitestiSibiu motorway section, has little chance of completion within the coming decade, and the main reason is incompetence.

“Some sections of the Sibiu-Pitesti motorway could be completed within eight years, but the entire project could take at least 15 years,” Pro Infrastructura Vice-President Ionut Ciurea told Business Review. Pro Infrastructura, an NGO that monitors infrastructure projects in Romania, constantly criticises government-appointed administrators of motorway projects.

“There is a lot of incompetence on the auction side, with many weak task books. It takes a year just to launch an auction in Romania. Generally speaking, there is a lack of administrative capacity to manage large infrastructure projects,” Ciurea said. This unexpected surge in new projects and contracts is usually associated with public pressure but this year there is another clear reason: the coronavirus pandemic.

PANDEMIC PUSH With many economic sectors having experienced a sharp collapse during the state of emergency, as they did in many other countries, Romania needs to stimulate those sectors that seem to be less affected by the pandemic. Construction works in a country that desperately needs infrastructure could bring that much needed boost to a declining economy, especially since many projects are financed through EU funds.

“The government aims to make massive investments in the development of transport infrastructure in Romania,” prime minister Ludovic Orban recently said. This push was already seen in the first quarter of 2020, when Romania ranked among the few EU countries that recorded economic growth.

The detailed figures released by the National Institute of Statistics (INS) showed that Romania’s gross domestic product (GDP), the index widely used to measure the size of national economies, rose by 2.7 percent in the first quarter of this year compared with the same period of 2019, and by 0.3 percent quarter-on-quarter. The sector that triggered this increase was construction, which increased by more than 32 percent yearon-year and contributed to about a third of the country’s GDP growth.

According to experts, infrastructure works have had a major impact on these numbers. “From the perspective of aggregate supply, the growth of the construction sector by 32.6 percent year-on-year in Q1 is outstanding, an evolution that reflects continued investment flows in the economy, especially before the incidence of the pandemic,” Andrei Radulescu, senior economist at Banca Transilvania, wrote in a recent report. This new momentum for infrastructure projects is a necessity for Romania, and not just in terms of facilitating transport. In fact, the number of cars and trucks saw a quick rise in Romania during the last decade – and the increase was associated with a surge in road fatalities.

DEADLIEST ROADS IN THE EU According to official data, the poor state of Romania’s roads has a huge cost in terms of lost lives. In 2019, the EU countries with the highest road fatality rates were Romania (96 road deaths per 1 million inhabitants), Bulgaria (89), Poland (77), and Croatia (73), according to the latest European Commission data. Meanwhile, the member states with the best road safety scores were Sweden (22), Ireland (29) and Malta (32).

But experts say the figures are disguising an even bleaker picture. “In fact, the situation is much worse because the resident population is at least a million inhabitants below the

figure used by Eurostat (19.7 million),” Pro Infrastructura said of the EU data. “Statistics show that although the construction of motorways is crucial, without radically improving safety across the existing infrastructure, especially in places where people live (building bypasses, eliminating black spots and taking pedestrian and cyclist protection measures), Romania will remain in the last place in Europe in terms of road safety,” the NGO added. The European Commission estimates the socio-economic cost of road deaths in Romania at EUR 3 billion a year.

UiPath IPO set to boost local startup power

UiPath, the automation startup with Romanian roots, may go public in 2021 in a move that would enhance the image of local entrepreneurs as generators of innovative companies that can quickly rise to valuations above USD 1 billion, reaching unicorn status. A successful Initial Public Offering (IPO) by UiPath would create a new generation of tech millionaires who could invest some of their wealth in the Romanian entrepreneurial ecosystem.

By Ovidiu Posirca

The next big question for the startup valued at USD 7 billion is selecting the best stock exchange

Asoftware robot for every person: this is the future envisioned by UiPath, whose Robotic Process Automation (RPA) platform is already being used by 6,300 customers worldwide. The company is working with half the Fortune 20 companies in the US, as well as with government agencies such as NASA, the European Medicine Agency, and several municipalities across Europe, according to company data. Now, the startup wants to reap the benefits of going public on an international stock exchange. The technology developed by UiPath is also used by corporate behemoths such as Google, Amazon, and Bank of America.

“There are many advantages of being a public company, including easier access to capital, more acquisition opportunities, and new means to attract and retain talent. As a public company, we would certainly plan to utilise these benefits,” Daniel Dines, the CEO and founder of UiPath, told BR.

Dines says that UiPath’s listing strategy has always been linked to its profitability. The startup could go in the black this year and head for the IPO in 2021, the executive suggested. “That said, we are not putting pressure on ourselves to accelerate plans to go public. We do not feel like we are in a position where we have to hurry,” says Dines.

The next big question for the startup valued at USD 7 billion is selecting the best stock exchange, where it could generate the most value for the business. The CEO has hinted previously that the NASDAQ could fit the bill. “When deciding on the stock exchange we

will list on, we’ll give precedence to those where a large part of our business is located, as well as our headquarters,” Dines told BR.

Local entrepreneurs questioned by Business Review suggested that UiPath was very likely to carry out its IPO in the US instead of the European Union or Asia, because that’s the market that generates a lot of its business and has covered most of its funding needs so far.

“That is a simple one, really: it will obviously be the NASDAQ, as UiPath is already so connected with the US tech environment and the appropriate investors for such a company are there already,” says Marius Ghenea, managing partner at Catalyst Romania.

Most of the tech giants are listed on the NASDAQ, so it would be a surprise if UiPath picked another stock exchange, added Bogdan Litescu, the founder and CEO of startup Plant an App. Meanwhile, Mihai Rotaru, the founder of Neobility, suggested that the NYSE or even Asian markets could be an option.

OPPORTUNITIES FOR THE ROMANIAN STARTUP INDUSTRY The founders and the core team of employees with stock options who have been on board from the start could get rich once UiPath goes public. The startup currently employs around 3,000 people.

“Some of these millionaires will continue their journey with UiPath as managers, but they might invest in other Romanian tech startups, ‘recycling’ the money in the same Romanian startup ecosystem that they are a part of, while others might decide to cash out and start their own entrepreneurial ventures, which would be excellent, because we are talking about people with experience, money, and with a startup mentality,” Ghenea tells BR. UiPath is already providing the community edition of its platform for small business and offers free access to RPA training via its own academy. Dines says that more than 750,000 people around the world use UiPath Community to learn RPA best practices while 100,000 use UiPath Academy to learn core RPA skills. A successful IPO

could feed more confidence to entrepreneurs that are just starting a company or looking at ways to scale it faster. “We believe that a successful IPO would send a positive message to B2B enterprise software startups – in Romania and beyond. Our hope is that it would send the message that if you take a great idea, turn it into a best-in-its class product, and surround yourself with the best talent you can find, investors will see your potential and customers will trust you with their business,” says Dines.

The CEO of UiPath adds that the IPO could reaffirm the idea that automation is here to stay as a technology. This could also bring more attention from international investors who could direct their funds to this region, adds Litescu of Plant an App.

If UiPath decides to carry out the IPO next year, it would join a plethora of other unicorn startups in the US, including Airbnb and Palantir. One of the risks entrepreneurs have to take into account is the ongoing medical crisis generated by the coronavirus. The pandemic is still wreaking havoc across the world and the emergence of a treatment is unlikely in the short term. The US stock exchange has already been battered by the effects of the crisis and a resurgence of the coronavirus might spook investors. It’s not clear to what extent the uncertainty surrounding the medical situation is going to impact the listing share prices for these firms.

“The current medical crisis has impacted different industries in different ways – some are heavily affected while others are growing. The tech industry is the biggest beneficiary

overall,” says Rotaru of Neobility. The leaders of these companies also need to assess the diverse and somewhat contradictory impact of this crisis on their specific segment. This means that all future IPOs in the US and elsewhere will need to take that into account, Ghenea concluded.

Coronavirus could be a gamechanger for Eastern European startups

The ongoing medical crisis caused by the rapid spread of the coronavirus has led to dramatic short-term changes in the way we approach work, home, and leisure activities. In the wider Eastern European region, including Romania, the question is whether the current crisis will force a change in entrepreneurs’ mindset and pave the way for a new wave of innovation.

By Ovidiu Posirca

Fixing some of the biggest problems in the world is among the most common visions among startups looking to disrupt a market or industry. The coronavirus is already a problem keeping many decision makers awake at night, while companies are competing to find a cure for this disease as quickly as possible.

The coronavirus remains a problem for business in general, but it’s not a gamechanger, suggests Marius Ghenea, managing partner at Catalyst Romania.

“Conversely, some startups are being very positively impacted by their clients’ behavioural changes, so we could see some of these startups quickly rising to fame and fortune, but this relies on these changes in behaviour being long-lasting and not just temporary adjustments due to the lockdown, for instance. On this one, only time will tell, but we are already seeing some trends transcending the lockdown, so we are starting to understand what could be the long-term changes,” Ghenea told BR.

Some 10,000 Eastern European startups have raised their first funding over the past 5 years, while 10 startups in Central and Eastern Europe (CEE) have become unicorns, which means their valuation has topped USD 1 billion.

The coronavirus crisis presents a unique combination of opportunity and risk.

“There will be a lot of market changes as large companies will either fail to adapt or invest heavily in pivoting – so we might soon see either acquisitions or market leader swaps, with consumer trends changing for the medium-to-long term. In any case, Eastern Europe has a chance, but only if entrepreneurs are brave enough to step up and act fast. Time will tell, and we will see that soon,” Mihai Rotaru, the founder of Neobility, told BR. Few businesses in Romania are attempting to expand in the region or internationally, but some new startups are taking the global route and raising money from international investors.

“They will pave the way for others to follow. To me personally, it doesn’t feel like we’ve reached critical mass for this path to become mainstream. At the same time, the coronavirus situation has added very strong elements to the foundation. In the Digital Economy and Society Index (DESI), Romania ranks second to last. Without digital competencies, entrepreneurs lack the basic tools to expand internationally. COVID-19 has definitely changed that, both in terms of technology adoption as well as in planning ahead while taking digital transformation into account,” says Litescu of Plant an App.

Entrepreneurs who have been struggling for years and have built up resilience will make a name for themselves on the international market once they get the

missing ingredient, says Litescu. This will happen despite the medical crisis or any other daunting challenge a business owner faces at some point in their activity.

EASTERN EUROPE STANDS OUT, EU BOOSTS HELP FOR FIRMS Emerging competitors in Central and Eastern Europe are starting to challenge the dominance of Western European companies, according to a Financial Times ranking of the 1,000 fastest-growing companies. “We have seen a democratisation of startups — they can be anywhere,” said James Wise, partner at London-based venture capital firm Balderton Capital. “The access to capital and ability to run off cloud infrastructure means the range of startup hubs has grown immensely,” according to the Financial Times. Meanwhile, the European Commission, the executive arm of the European Union, has awarded around EUR 166 million to 36 companies set to combat the coronavirus pandemic. Another EUR 148 million will be granted to 36 more companies set to contribute to the recovery plan for Europe.

A record number of around 4,000 startups and small and medium businesses (SMEs) applied to the EIC Accelerator pilot in March, of which over 1,400 proposed innovations that were relevant to the coronavirus outbreak.

Another EUR 150 million was recently allocated to this funding round, bringing the combined total to over EUR 314 million. The startups and SMEs selected for support come from 16 countries, including 12 EU Member States, the UK, and 3 associated countries, according to the EC. Although it’s hard to tell how many startups will survive the disruptive effects of the coronavirus, a survey by Paris startup campus Station F, which polled investors about the impact of the COVID-19 crisis, brings some good news, as it found that 94 percent of VC-backed startups would survive the next six months. “It’s a solid ecosystem that’s made changes, but really hasn’t been shaken up to the point of in-depth soulsearching,” said Roxanne Varza, director of Station F.

Some 1,000 companies across Europe — in France, Germany, and the UK — as well as in the US and Israel were represented in the survey. Despite the crisis, almost half of respondents said that they would maintain their plans to expand into new markets. Moreover, startups continue to raise money. Fundraising rounds were delayed for 40 percent of startups during the crisis. That’s the share of companies that are trying pitch investors for money now.

OPINION Murielle Lorilloux, CEO Vodafone Romania Digitalization has a big part to play in the economic recovery, to build a more resilient and inclusive society

The outburst of the COVID-19 pandemic has raised up huge and numerous challenges for families, businesses, authorities, and society at large.

At Vodafone Romania, we took rapid actions to ensure that our own business continues to operate at full strength under these exceptional circumstances, while being able to fully support our customers and society in general.

With the world under pressure and with constant uncertainties around us, we really had to act fast and smart, while keeping in mind our top priority: protecting our team, our partners, and our customers. As an immediate measure, we moved over 80 percent of our em

ployees to work from home and took all the necessary measures to protect the health and safety of our field teams (network and operations), as well as our employees in retail locations.

For sure, in such unprecedented times, fixed and mobile communications have become vital infrastructures, supporting everything we needed to do. It became very clear that our mission, more than ever, was keeping all our customers connected and providing them with all the communication services they needed to work, learn, stay connected to family and friends, and have access to healthcare and emergency services. In a matter of days, we adjusted many of our flows and processes and implemented initiatives that in normal circumstances would have probably taken weeks or months.

With the increase in traffic that we experienced on both the mobile and fixed networks, we have accelerated investments in a number of areas to boost network capacity in order to meet the growing demand. Our engineers have worked hard to maintain the best network quality and increase capacity so that mission critical and other essential communications during this period, such as voice and digital access to health and education or people’s ability to work from home, would not be impacted.

For our customers, whether businesses or residential, we focused on implementing relevant offers which could benefit them in a meaningful way, while widely applying a proactive approach in supporting them on a case

by case basis. We put all our efforts in supporting authorities, government departments and healthcare institutions by providing the communications services they needed. The Vodafone Romania Foundation immediately got involved in supporting priority healthcare and online education initiatives.

Our donations of money and benefits in kind during the first phase of the crisis through both Vodafone Romania and Vodafone Romania Foundation initiatives amounted to approximately 1 million euros and exceeded 100 million euros across Europe and Africa at the Vodafone Group level.

For us, this is just the beginning. As we start to rebuild our society, we realise that we can only make this effort together and much more will be required from everyone. There are difficult weeks and months behind us and we all hope that the pandemic’s worst belongs to the past. However, we have significant challenges ahead, which economic forecasts just come to confirm. The European Commission anticipates that the EU economy will be hit this year by the deepest economic recession in its history. Romania’s GDP is predicted to decline by 6 percent in 2020, while the unemployment rate is forecast to reach 6.5 percent.

At the same time, the COVID-19 crisis has equally exposed vulnerabilities in society, business, and public services that we cannot ignore. It is vital for recovery plans to be fundamentally aimed at building a more resilient, inclusive, and digital society for a better and more sustainable future.

Accelerated digitalization must play a central role, recognising the essential contribution that digital infrastructure, services, and tools have played for the vast majority of people and businesses during the health crisis. We need to act with determination and set a more comprehensive and ambitious digital agenda for Romania to create the necessary legislative framework and to quickly implement solutions for the use of digital tools. In my view, there are four key areas to focus on:

INCLUSION. Resilience must benefit everyone. Every student and every citizen must have digital access and digital skills so that they can benefit from equal opportunities in a digital world. Through the COVID-19 crisis, education systems around the world faced an unprecedented challenge, leading to a sudden and largescale switch to digital education tools. However, this shift has exposed vulnerabilities and gaps, which risk leaving too many students behind. According to Education Ministry officials, 250,000 students in Romania have no electronic equipment allowing them to participate in the remote education system and only 60 percent of the students have participated in online courses during the lockdown. Connectivity and digital tools alone are not enough; people must have the appropriate skills to take advantage of the digital society. The latest DESI 2020 Report revealed that Romania lags far behind its EU peers (ranking second to last), with less than one third of people aged between 16 to 74 having basic digital skills, compared to the EU average of 58 percent.

BUSINESS ENVIRONMENT RESILIENCE. It’s becoming clearer that digitalization is key for companies of all sizes to continue to operate and to survive, and we need to improve the level of digitalization for SMEs especially, as they will be the engine of our economic recovery. Digital technologies not only enable businesses to be more competitive, improve their services, and gain new markets, but also make them more resilient and adaptable to future challenges. Looking again at the DESI 2020 Report, Romania ranks at the lower end of the EU in terms of integrating digital technologies in business.

PUBLIC SECTOR. While digitalizing the public sector has been on the agenda for a long time, the COVID-19 crisis has further revealed its urgency, but also its potential. In just a few weeks we have seen several positive changes and decisions enabling an extended digital interaction of citizens and businesses with public institutions. We need to make sure that this is not a reversible process and efforts must continue in order to accelerate the provisioning of critical public services. eHealth and eEducation solutions should be integrated into the “new normal” public service frameworks.

DIGITAL INFRASTRUCTURE. While being committed to delivering our digital promise, we re-emphasise the need for a constant and constructive dialogue with authorities regarding the legal framework for infrastructure, with special focus on legislation regarding the authorization process for construction projects and regulated tariffs for access on private property, enabling faster construction and adoption of new technologies countrywide. Also, including telecom infrastructures in the European and national road construction plans as well as in county road and urban modernization projects is an essential step forward enabling and supporting more efficient ways of deploying our networks.

While our sector has been (and is likely to be) less impacted by the crisis than some other industries, we are far from immune. In addition, COVID-19’s impact adds to the poor industry performance in terms of return on capital and returns for shareholders, a situation seen across the European telecom sector for many years now. Considering the key role in 5G will play in the digitalization of the entire society, while also involving high investments from operators, government support is critical to ensure an efficient and effective deployment of new technologies. License and spectrum fees should be rescaled and aligned with the Romanian ARPU, along with a sustained co-investment programme as a healthy public-private partnership. Very high capacity networks require a significant amount of network elements to be widely available, therefore it is essential to take advantage of the existing infrastructures by ensuring effective access to passive facilities and wholesale fiber.

These are important times for resilience building. We must act quickly and decisively. We must take this opportunity to enhance our digital infrastructure, reduce the gaps and accelerate the digitalization of all our citizens, businesses, and government services, to the benefit of society and for a more resilient and sustainable future.

Achieving this depth of transformation will require much closer collaboration between government, businesses, and citizens. Vodafone Romania is ready to play its part.

Internet and mobile data traffic grew by a third during the first two months of the pandemic

During the 60-day state of emergency, data and internet traffic increased on average by 26 percent, i.e. by 30 percent on fixed networks and 5 percent on mobile networks, while voice traffic grew on average by 11 percent, compared to the 60 days preceding the introduction of the state of emergency, according to Romania’s National Authority for Management and Regulation in Communications (ANCOM).

By Aurel Constantin

In the March 16 – May 15 2020 period, Romanian users consumed 1,800 PB (petabytes) of internet and data traffic (+30 percent compared to the previous period) on fixed networks, and 200 PB (+5 percent) on mobile networks. The bigger increase in data traffic on fixed networks may be related to the fact that most users were at home during the state of emergency, using Wi-Fi connections from fixed internet routers rather than mobile internet, including for the consumption of voice or data on mobile devices. “As we estimated since mid-March, the demand for electronic communications services registered exceptional upward trends in the 60 days of the state of emergency in Romania. However, the increases were tempered by European Commissioner Thierry Breton’s call for a responsible transmission and use of video streaming services such as Netflix, Youtube or Facebook, so that the share of this type of traffic on mobile networks decreased from 55 percent to 49 percent during this period,” said Eduard Lovin, the vice president of ANCOM.

As for voice traffic, during the state of emergency, call traffic increased by 11 percent, exceeding 13 billion minutes (97 percent on mobile networks).

“In the context of the state of emergency and social distancing requirements, communication networks allowed us to keep in touch with our loved ones, to work safely from home, to learn online; in short, to stay connected to each other. Seeing that over 2,000 PB of data were transferred through communications networks in our country

By the end of 2019, Romania had 5.3 million fixed internet connections

in the 2 months of the state of emergency, I think that it is only now, in the aftermath of such a straining period, that we all realise the essential role that communications have in our lives and how important it is to have a sustainable infrastructure. Romania can be proud of the way in which its operators managed networks during this entire period,” stated Sorin Grindeanu, the president of ANCOM.

PEAK HOURS DURING THE PANDEMIC ANCOM estimates show that, during the state of emergency, the busiest hours in terms of fixed and mobile communications (internet and telephony) consumption were from 6 to 7 PM on March 22, 2020 – when the highest internet and data consumption was registered on fixed networks, at 2.3 PB. It was the moment when the first restrictions imposed by Military Ordinance no. 2 on measures to prevent the spread of COVID-19 were established (closing malls and dental clinics and forbidding the entry of foreign citizens and stateless persons to Romania). The highest voice consumption was on March 23, from 11 AM to 12 PM, with 35 million call minutes, when the Romanian president delivered a

major statement. A similar consumption peak was recorded on April 19 (from 11 AM to 12 PM), a traditionally busy time on the first day of Easter. Another peak was from 8 to 9 PM on March 25 – the highest internet and data consumption on mobile networks: 0.25 PB, when restrictions on people’s circulation outside their homes and the cancellation of some flights were imposed through Military Ordinance no. 3.

The data provided by operators show that they generally complied with ANCOM’s recommendation not to suspend services for bill payment defaults, so that even users with outstanding invoices and whose services should have been suspended under normal conditions could have access to internet and telephony services during the state of emergency.

DATA TRAFFIC DURING LOCKDOWN The first days of restrictions, in March, were the busiest for companies trying to comply with the new rules and to keep employees working. For most companies, the change was made in 3 days, at the start of the restrictions, during which they made efforts to find ways for employees to work from home.

But data communications didn’t move entirely from offices to homes. Even with empty or mostly empty offices, companies used their own servers to establish communication platforms and databases for their employees. “Many of the remote connections went through the companies’ servers, so the traffic was registered on their behalf, even though employees were connecting from home, using their internet lines,” said Vladan Pekovic, Technology & IT Director at Telekom Romania.

At Telekom, the fixed and mobile data traffic increased by 25 percent during the lockdown compared to the period before the pandemic. Voice consumption went up by 24 percent, with calls longer by 20 percent on mobile and by 50 percent on fixed lines. HIGH-SPEED INTERNET CONNECTIONS By the end of 2019, Romania had 5.3 million fixed internet connections. Three quarters of those allowed very high data transfer speeds exceeding 100 Mbps. The connections and networks were heavily tested during the state of emergency, and they are now regarded as utility services and high-importance infrastructure. In 2019, the number of fixed internet connections rose by 4 percent. The average fixed internet data per inhabitant was 29 GB per month, up 14 percent compared to 2018. The penetration rate of fixed internet per 100 households was 64 percent at the national level in 2019, i.e. 75 percent in urban areas and 49 percent in rural areas. Considering the number of fixed internet connections at the end of 2019, RCS&RDS had a market share of 53 percent, followed by Telekom Group with a market share of 21 percent, with the rest of providers totaling 26 percent.

On the mobile internet market, at the end of 2019 there were 12 million 4G connections, up 4 percent from 2018. Of the total 19.9 million active mobile internet connections in Romania, 4G covered 61 percent. The average mobile internet data traffic/inhabitant was 3.7 GB per month, 41 percent above the previous year. According to ANCOM data, Orange had a market share of 39 percent, followed by Vodafone with a market share of 25 percent, with the rest of providers totaling 36 percent.

There were also 22.7 million active mobile SIM cards, of which 58 percent were subscription-based and 42 percent were prepaid cards. The average mobile telephone traffic per inhabitant was 4 hours and 44 minutes per month, while the average SMS traffic was 44 units per month; these values are on a slightly downward trend, due to the growing usage of instant messaging apps and social networks. Orange had a market share of 39 percent and Vodafone had 30 percent, with the rest of providers totaling 31 percent.

Fixed telephony maintained its downward trend in 2019, with 8 minutes per month as the average for fixed telephony traffic per inhabitant, down 17 percent. Telekom Group is the leader of this market with a 40 percent share, followed by RCS&RDS with 35 percent. There were also 7.6 million TV subscriptions, of which 5.4 million were cable TV subscriptions. RCS&RDS had a market share of 53 percent, Telekom Group had 17 percent, and the rest of providers totaled 30 percent. Revenues in the telecom sector increased by 3 percent in 2019, amounting to EUR 3.5 billion.

The mobile telephony sector generated

39 percent of all revenues in the market, the fixed and mobile internet segment accounted for 30 percent, TV channel retransmission for 14 percent, and the other services made up 17 percent. The average monthly revenue from the telecom sector was RON 71 per inhabitant. Considering the revenues obtained in 2019, Orange had a market share of 26 percent, Vodafone Group and Telekom Group of 24 percent each, and the rest of providers totaled 26 percent.

Pandemic builds up companies’ appetite for digitalization

Romania has been ranked among the last countries in the European Union when it comes to digitalization by several different studies, but this doesn’t mean that the country can’t move quickly towards higher rates of digitalization and catch up with the rest of EU, said Mihnea Radulescu, Enterprise Business Unit Director at Vodafone Romania, during the first Call4Leaders video conference, hosted by Business Review.

By Aurel Constantin

The COVID-19 pandemic has affected many companies, some to a larger extent than others. “What we saw during the state of emergency was that those companies that were more advanced in terms of digitalization were able to adapt more easily to the new reality,” said Mihnea Radulescu, adding that there were companies that found ways to continue operating and thrive in online sales even in the hotel and restaurant industries.

One of the few good things that have come out of the COVID-19 crisis is that most companies are actively thinking about digitalization, online presence or automation. “At Vodafone, we have a large client base, from small and very small companies to large corporations. Sure, there are different levels of training, but the important thing is that we are seeing this desire for digitalization in all of them as they have understood what technology can do for them,” said Radulescu.

The power to adapt was proven in the state of emergency when thousands of employees were switched to a home-working environment within a matter of days. It was not easy, work-from-home for many companies doesn’t mean just having a laptop and an internet connection to start working. For employees in call centers or those who still use a desktop computer at the office, setting

up at home was not an easy task. But the results were incredible and companies whose employees could work from remote places didn’t experience any pause in activity.

“Connectivity or communication infrastructure has become a utility like water or electricity. Like us at Vodafone, all internet and communications providers saw their data traffic rapidly increasing, especially on fixed lines, but the networks worked without any problems,” noted Radulescu. Unsurprisingly, Bucharest and Romania in general are among the best prepared places in Europe when it comes to working from home, mainly due to the quality of the communications infrastructures.

TECHNOLOGY FOR EVERYONE Companies’ requirements and needs related to the digital solutions have evolved during the pandemic crisis. “After a good setup for a home office, companies started to ask for more sophisticated things, like secure online environments or backup connectivity for remote employees. We already had backup solutions with mobile-connected Wi-Fi routers, which ensure round-the-clock backup. We even offered free data traffic to customers who were most affected by the crisis,” explained Mihnea Radulescu.

Vodafone was also asked for solutions for temperature screening in companies and institutions, making sure that in case someone had a fever when entering a building action could be taken quickly. The main opportunities today are from Internet of Things (IoT) solutions. “I see great appetite and potential for IoT solutions, with sensors connected through mobile networks, which ensure not only connectivity, but also business solutions, increasing efficiency and productivity.” Radulescu noted. From automation to healthcare, there are IoT solutions for everything. “There are solutions that allow doctors to perform ultrasounds on patients online! Before the crisis, such things may have sounded like science-fiction, but now they can become a reality,” said Mihnea, explaining that the same types of automated solutions have also found their way into agriculture. By means of sensors and connected equipment, IoT can bring value to the business of any company, valuable information and data for their activity. “5G technology will allow us to make a leap in the machineto-machine (M2M) connectivity zone, with a latency that is close to zero. That will change the future, we will experience a new reality much sooner than we might expect,” he added. The challenge for all providers, including Vodafone, the leader of the Romanian IoT market, will be to bring these solutions to small companies. “SMEs are the backbone of the economy and we should help them when they are in need, we should move the technology closer to them. Vodafone already has solutions than can be customised to a certain level, but we need to offer even more,” concluded Mihnea Radulescu.

“CONNECTIVITY OR COMMUNICATION INFRASTRUCTURE HAS BECOME A UTILITY LIKE WATER OR ELECTRICITY. LIKE US AT VODAFONE, ALL INTERNET AND COMMUNICATIONS PROVIDERS SAW THEIR DATA TRAFFIC RAPIDLY INCREASING, ESPECIALLY ON FIXED LINES, BUT THE NETWORKS WORKED WITHOUT ANY PROBLEMS.”