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Moving to fixed-line competition
Macau is situated at the Pearl River Delta on the southeast coast of Mainland China, only 60km southwest of Hong Kong. Colonised by the Portuguese in the 16th century, Macau was the first European settlement in the Far East. Pursuant to an agreement signed by China and Portugal in 1987, Macau became the Macau Special Administrative Region (SAR) of the People’s Republic of China in 1999 after 400 years of Portuguese rule. In this agreement Macau would enjoy a high degree of autonomy in all matters except foreign and defence affairs for the next 50 years. The Basic Law provides for an independent executive, legislature and judiciary.
Macau has built itself a strong modern telecoms infrastructure and large scale infrastructure projects continue to provide opportunity for expansion to telecommunications operators.
While fixed lines reached an effective saturation point a few years ago and penetration is steadily declining, the country’s mobile market is one of the most highly penetrated in the world. There were over 1.6 million mobile subscribers going into 2013, representing a penetration rate of over 275%, although many of these are prepaid subscriptions. Rapid growth in the mobile sector can be attributed to strong competition since the opening of the market in 2001. The advent of 3G in 2007 has seen the 2G share of the market slip to below 1%. The 2G network switch-off has been delayed from mid-2012 to 2015, giving the regulator time to assess 4G opportunities in the interim.
Macau’s internet user penetration rates are amongst the highest in the world at close to 70%. Broadband population penetration remains below 25%, an indication of the lack of competition in the fixed-line sector. However, the incumbent CTM launched FttX broadband services in 2010 and expects to have 100% coverage by 2015. In December 2011 CTM’s exclusive telecommunications concession for fixed-line services in Macau came to an end.
In mid 2012 Macau Cable TV, the country’s sole cable TV provider, announced that it was prepared to invest US$25 million in the local telecoms market and was open to cooperation with other local operators. Macau Cable TV does not currently offer broadband internet or telephony services. Neither did the company come forward in the government’s tender for two new fixed network operating licences after the liberalisation of the sector at the end of 2011. The sole company to submit an application by the deadline of 27 March 2012 was locally-incorporated MTel Telecommunications.
In early 2013, Cable & Wireless Plc confirmed that it had agreed to sell its controlling 51% stake in CTM for US$750 million to Hong Kong-based Citic Telecom International Holdings. Concurrently, Citic Telecom agreed to acquire the 28% stake in CTM held by Portugal Telecom for US$410 million. The two transactions will give Citic a 99% stake in CTMS’s fixed, wireless and broadband operations.
The new fixed network operating licenses had yet to be awarded by April 2013.
(Source: BuddeComm based on industry data and BuddeComm forecasts)