Executive summary
Albania’s telecom market has considerable room for further development given that in most sectors it remains far below European levels of maturity. The fixed-line sector has one of the lowest penetration rates in the region, at about 10%, and this has impacted on consumer take up of broadband services, which is also very low. On the other hand, poor fixed-line infrastructure has encouraged consumer use of mobile telephony, and now Albania boasts one of the highest mobile penetration rates in Europe.
The country has sought accession to the European Union (EU) which has benefited its telecoms sector through closer scrutiny of its regulatory regime and through the injection of funding to help modernise infrastructure. Albania signed a Stabilisation and Association Agreement with the EU, which came into force in mid-2009. As part of the EU pre-accession process, Albania has received financial aid to build public institutions and improve cross-border co-operation under the EU’s Instrument for Pre-Accession Assistance funding mechanism.
Albania’s economy enjoyed strong growth in GDP, albeit from a low base, and was not as deeply affected by the economic difficulties of 2009 as were other regional economies. Despite the continuing economic turmoil and its impact on Albania’s main trading partners (Italy and Greece), GDP growth is expected to reach 3.5% for 2010 and 2.5% for 2011.
The EU’s accession requirements have meant that Albania’s regulatory measures need to adopt a range of principles to encourage market competition. Thus far, these measures have been slow to develop though progress has been made in areas such as number portability. The government has set up agencies to encourage consumer use of e-government services and other internet-based services in a bid to encourage e-commerce and ICT. Recognising the potential of applying ICT to improve both social and economic development, Albania has taken steps to develop a knowledge-based society, principally by improving IT literacy.
Future network development is expected in order to support the growing popularity of broadband services: given the low broadband penetration level, Albania’s internet market offers considerable growth potential. The recent auction of a second 3G licence will also go far to stimulating mobile broadband use, and so alleviate poor connectivity in rural areas.
Albania’s mobile market has undergone rapid growth due to competition, with the entrance of Vodafone, Eagle Mobile and Plus Communication. The majority of mobile users utilise prepaid services, with its inherent affordability and flexibility popularising mobile ownership. With the mobile voice market maturing, operators are looking to mobile data applications and services to increase ARPU.
Key telecom parameters – 2010; 2012
Sector
| 2010
| 2012 (e)
|
|---|
Subscribers to telecoms services (thousand):
|
|---|
Fixed-broadband
| 120
| 205
|
Fixed-line telephony
| 331
| 340
|
Mobile telephony
| 4,547
| 5,150
|
Subscriber penetration rate:
|
|---|
Fixed-broadband
| 3.7%
| 6.1%
|
Fixed-line telephony
| 11%
| 12%
|
Mobile SIM
| 148%
| 159%
|
(Source: BuddeComm)
Market highlights:
- The 3G sector will be stimulated by the entry of a second 3G operator in late 2011. By mid- 2011 there were 112,000 subscribers who use 3G wireless network cards and modem devices.
- Further regulatory measures are required in the underdeveloped mobile sector: mobile licences are not technology neutral, nor is there provision for MVNOs to enter the market. Restrictions on refarming 900/1800MHz 2G spectrum for 3G services will also retard the development of mobile broadband and high-end mobile data services: refarming frequencies in these bands would be in line with developments elsewhere in Europe.
- A public consultation to reduce SMS tariffs to 2013 will stimulate consumer use of the service following a dip in 2009. Prices remain high by comparison with neighbouring Balkan countries.
- Following market liberalisation in 2007, several alternative operators now offer services and the market’s growth potential has attracted international investment. Yet Albania’s fixed-line penetration, at about 11%, is among the lowset in the region. This has stymied the development of the broadband market yet resulted in the very rapid adoption of mobile phones as the preferred means of communications.
- Upgrades to the Bari-Durres Cable System, owned by Albtelecom and Telecom Italia Sparkle, from 2.5Gb/s to 20Gb/s will considerably boost Albania’s international connectivity and enable consumers to make greater use of IP-data and services.
- Competition in the broadband sector has resulted in Albtelecom retaining just 53% of subscribers, with altnets having a 37% share and Vodafone a 9% share (through its mobile network). Most of Albtelecom’s DSL subscribers are serviced through an FttN network: regulatory changes are required to enable altnets to have access to this network, which would stimulate broadband connectivity in coming years.
Henry Lancaster
November 2011
Data in this report is the latest available at the time of preparation and may not be for the current year.
This report provides a comprehensive overview of trends and developments in Albania’s telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:
- Market and industry analyses, trends and developments;
- Facts, figures and statistics;
- Industry and regulatory issues;
- Infrastructure;
- Major players, revenues, subscribers, ARPU, MoU;
- Internet, VoIP, IPTV;
- Mobile voice and data markets;
- Broadband (FttH, DSL, cable TV, wireless);
- Convergence and digital media;
- 3G subscriber and mobile ARPU forecasts to 2015;
- Broadband market forecasts for selective years to 2020.
Key developments:
SMS tariffs reduced; number portability launched; second 3G licence awarded; regulator market data for H1 2011; operator data to September 2011.
Companies covered in this report include:
Vodafone Albania, Albtelecom, AMC, Cosmote, Turk Telecom, Primo Communications, Eagle Mobile.
This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Albania. It provides further information on:
- Market liberalisation and regulatory issues;
- The impact of the global economic crisis;
- Telecoms operators – privatisation, acquisitions, new licences;
- Mobile data market developments in coming years in light of spectrum auctions and new license awards in 2011;
- 3G developments, regulatory issues and technologies;
- Broadband migration to an FttH architecture;
- Historical and current subscriber statistics and forecasts;
- ARPU statistics and forecasts.
