Internet-Themed Slovak Trade Fair Ends

Cofax, the largest national IT trade fair in Slovakia, ended last week in country’s capital of Bratislava. Of the 186 exhibitors, the vast majority were telecommunications and Internet companies.

Slovak communication infrastructure is still underdeveloped in comparison with neighboring countries, particularly Hungary, Poland and the Czech Republic, but it is rapidly growing despite the depressed economic situation of the country.

There is about 50 ISPs in Slovakia, but most of them are extremely small “garage” companies of strictly local importance.

Much of this limitation is due to high connection fees. The price of connection increased significantly as a result of the January 1998 changes in the VAT (value-added tax) classification, when services including software, telecom fees and ISP fees were re-classified to a 23 percent tax instead of previous 6 percent VAT.

Another drawback is caused by the network infrastructure and telephony services monopoly of Slovak telco, Slovenske Telekomunikacie, which is contracted from government until 2003. However, a revised telecommunication law is now being prepared. This may allow Slovakia’s telecom sector to align with EU directives and could speed up liberalization of the telecom market.

In an effort to lower imports, a 7 percent tariff is applied on all imported products. Since the local IT market is completely dependent on import, hardware is more expensive in Slovakia than in other Central and Eastern European countries.

The government also ordered that every electronic product, from TV sets to modems and PCs, be certified by a Slovak agency. The fee is relatively low, but there are up to two-month delays in processing. Products sold without certification are subject to a substantial penalty.

The number of Internet users in Slovakia is estimated as about 75,000 in a population of
5 million — almost the smallest among European post-communist countries (only Russia has lower Internet usage).