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Moldova - Telecoms, IP Networks, Digital Media and Forecasts

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Market Briefing
Published: September 2013
Pages: 37
Research from: Paul Budde Communication Pty Ltd.
Sector: Networks & Infrastructure

From: GBP 297.00
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Market highlights:

The uncompetitive fixed telephony market will receive a boost by mid-2013 with the introduction of number portability, enabling customers to retain their phone numbers while switching to another provider within five days. MNP, expected from May 2013, will also have an effect on churn and so encourage operators to provide improved services.
Broadband penetration, approaching 13% by the end of 2012, is largely focussed on emerging FttX networks driven by consumer demand for new services such as IPTV. With the number of subscribers continuing to grow strongly, the relatively underdeveloped market promises to sustain considerable growth in coming years, particularly from the fibre and mobile broadband sectors.
The fixed telephony sector is among the few in Europe showing an increase in numbers, largely due to the existing low base of subscribers. However, revenue fell 10% in the first half of 2011, a trend continuing from 2009, as customers take to alternative VoIP and mobile services. Moldtelecom remains the main player, but the 57% growth in the number of subscribers to alternative operators points to a marked shift in the incumbent’s dominance.
Fixed number portability was launched in August 2013, following MNP earlier in the year.
The regulator in mid-2013 launched a consultation on auctioning frequencies in the 1900MHz and 2100MHz bands for 3G, with a view to encouraging new entrants.

Moldovan mobile data growth on back of commercial LTE launch

These Moldovan telecoms market has shown some remarkable growth in recent years despite the poor economic environment. This is partly because many areas of the market remain relatively under-developed and so there is considerable room for growth. This has encouraged operators to continue to invest in all sectors except fixed-line telephony, where customer interest has been diverted to the mobile sector. In addition, Moldova’s aspirations to join the European Union (EU) have encouraged the government and regulator to adopt a range of measures to bring the country’s telecoms sector into line with EU principles and standards.

Moldova’s internet market continues to develop rapidly, and with broadband penetration approaching 13% (well below the average for many Western European countries) there remain considerable opportunities for further development in coming years. Broadband subscriber growth has been particularly strong since 2009, with the sector dominated by two service providers – Moldtelecom and StarNet – which account for 88% of all connections despite the presence of about 50 ISPs nationally.

The mobile market has also grown rapidly and now accounts for the majority of total telecoms revenue. A triopoly of operators is dominated by Orange, while the launch of 3G/HSDP networks has opened up a new revenue growth opportunity centred on mobile broadband, with the mobile operators well positioned due to the lack of effective fixed-line broadband competition beyond the main cities. The near comprehensive geographical reach of their mobile networks, market brand recognition and existing customer relationships will make for steady subscriber growth. In late 2012 Moldcell launched 4G services. Competition from Orange Moldova, which also won spectrum suitable for LTE, will help reduce prices for consumers while coverage obligations will ensure than most areas are served by 2015.

Moldova – Key telecom parameters – 2010; 2013

Penetration of services
2010
2013 (e)
Broadband
7%
13%
SIM penetration (population)
88%
127%
Fixed-line telephony
32%
35%
(Source: BuddeComm based on industry data)

Market highlights:

The uncompetitive fixed telephony market will receive a boost by mid-2013 with the introduction of number portability, enabling customers to retain their phone numbers while switching to another provider within five days. MNP, expected from May 2013, will also have an effect on churn and so encourage operators to provide improved services.
Broadband penetration, approaching 13% by the end of 2012, is largely focussed on emerging FttX networks driven by consumer demand for new services such as IPTV. With the number of subscribers continuing to grow strongly, the relatively underdeveloped market promises to sustain considerable growth in coming years, particularly from the fibre and mobile broadband sectors.
The fixed telephony sector is among the few in Europe showing an increase in numbers, largely due to the existing low base of subscribers. However, revenue fell 10% in the first half of 2011, a trend continuing from 2009, as customers take to alternative VoIP and mobile services. Moldtelecom remains the main player, but the 57% growth in the number of subscribers to alternative operators points to a marked shift in the incumbent’s dominance.
Fixed number portability was launched in August 2013, following MNP earlier in the year.
The regulator in mid-2013 launched a consultation on auctioning frequencies in the 1900MHz and 2100MHz bands for 3G, with a view to encouraging new entrants.

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