Technological Advancements See Eastern European Road User Charging Markets Shift into Top Gear

Frost: Increasing road congestion coupled with ongoing technological advancements in Eastern Europe is driving innovation in tolling methods in the region. The concept of road user charging (RUC) – or the charging of a vehicle based on the distance it travels on a highway – has revolutionised tolling in Western Europe and is set to do so in Eastern Europe as well. Strategic Analysis of the Road User Charging Markets in Eastern Europe, reveals that this market generated revenues of €1.5 billion in 2004 and estimates this to reach € 2.6 billion by 2015.

Rising road congestion and pollution have intensified environmental concerns in the European Union (EU). This, combined with the need to increase revenues in order to finance multiple infrastructure projects, has led many countries in the EU to implement road user charging as a matter of course.

Electronic toll collection systems account for the bulk of the European RUC market, with an overall share of 84 per cent overall. Revenues derived from these systems are likely to increase from €12.9 million in 2003 to €17.7 million in 2011. Although, manual toll collection systems dominate in eastern Europe, the success of microwave-based/dedicated short-range communication (DSRC) systems and satellite-based vehicle positioning systems (VPS) in western Europe indicates that eastern Europe will also gradually shift towards more technologically advanced methods.

Currently, the lack of standardisation and interoperability between Eastern European countries is proving to be a significant challenge to the development of RUC systems within the region. This is primarily due to the varying levels of infrastructural development and the different types of systems in use within the individual countries.

Government ministries are looking to address this challenge by implementing legislations, whereby the market for RUC systems will see an increasing convergence of business processes with IT solutions and mobile communications. While achieving standardisation and interoperability between countries is not likely to be an easy task, the compelling need to do so opens up significant opportunities for systems integrators and providers.

Following the success of the microwave-based/DSRC system developed in Austria and Switzerland as well as the revolutionary satellite-based VPS introduced and operated in Germany, countries in eastern Europe are proactively issuing tenders with the aim of choosing a system most suited to their needs and objectives.

As a result, the market for on-board units (OBUs) installed in vehicles being charged under these systems will grow significantly over the next five years to ensure compliance with EU standards for interoperability. Interoperability initiatives also aim at the implementation of a single OBU for Europe-wide toll collection and this is likely to drive vehicle manufacturers to integrate OBUs as standard devices in vehicles.

Future trends indicate that Europe will increasingly move from DSRC to VPS systems, which in turn will drive VPS adoption in eastern Europe, as the interoperability issue is gradually resolved. This is borne out by the massive growth in VPS OBUs from 8,000 units in 2003 to 500,000 units in 2004. VPS technology is likely to hold approximately 60 per cent of the market by 2015 Market trends also indicate that the EU will mandate the use of this dynamic technology for all heavy vehicles by 2013.

With the installation of satellite-based tolling systems in eastern Europe, more systems integrators from other parts of Europe are likely to enter the market, explains Ms. Srinath. Companies should consider strategic alliances with other participants to benefit from economies of scale and systems suppliers need to collaborate to create an interoperable system across Europe, as technological pioneers are likely to capture maximum market share.

Strategic Analysis of the Road User Charging Markets in Eastern Europe Publ 20060509