Executive summary
As East Timor lifts itself out of the ‘critical’ category in the Index of Failed States, the demand for telecom services is strengthening.
East Timor, which adopted the name Timor Leste and has come to be commonly known by both versions of the name, is continuing its struggle to simply maintain integrity as a nation. In fact it is widely considered to have gone backwards for a period. The country ranked number 23 in the 2011 Index of Failed States, not a promising statement on its national development status; however, this was up from 20 in the 2009 Index. So in the last few years East Timor has lifted itself out the ‘critical’ 20 category with some modest gains in the way it manages itself. The nation has been pressing ahead with the regeneration of its economy and the rebuilding of infrastructure. The effort to roll out telecommunications infrastructure in particular has been a key part of this. Despite the considerable energy that has been going into this rebuilding, the prevailing social and political environment continues to present major challenges to those seeking to improve the country.
Political instability and the civil unrest erupted in East Timor in 2006 and continued into 2007. Despite the election of a new government led by Nobel Peace Laureate Jose Ramos-Horta in 2007, opposition to the administration caused further violence and looting. A state of emergency declared in 2008 was lifted a few months later, following the surrender of most of the rebels.
To the outside observer, the country appeared to have started reasonably well in rebuilding its entire infrastructure following the turbulence that ensued after the referendum of 1999. However, the events of 2006/07 caused major concerns about the direction of East Timor; it remained difficult to assess the long term impact of these events on the country’s fragile economy.
East Timor remains one of the poorest countries in the Asia-Pacific region, despite the implementation of a National Development Plan and the considerable progress it has made since independence. The ongoing challenges are significant; the public sector administration, law and justice, and governance are all crying out for further attention, whilst a critically low skills base, high population growth and limited prospects to generate jobs combine to compound the situation further. East Timor faces a complex array of problems. It will need substantial assistance from the international community, for some time to come.
In the meantime, throughout this most difficult of political periods, the country’s telecommunications sector has been expanding with the mobile telephone sector experiencing a particularly strong and sustained surge. After recording huge annual growth rates over a number of years from 2006 onwards, by the start of 2011 the country’s mobile subscriber base had increased nine fold in just five years and penetration was almost 40%. Fixed-line network expansion was still languishing coming into 2011, however, with fixed teledensity down around 0.2%. Although it was difficult to get accurate figures on the Internet market, it was clear that growth in this sector remained highly constricted and there was little optimism about online activity in East Timor in the short term. Whilst there was a limited broadband service in the country, the number of subscribers remained low.
East Timor finally became a member of the ITU a few years ago. While the ITU does provide some statistical information on this market, it has continued to be a difficult task to obtain official statistics for the country’s telecom sector. Where official statistics are not available, BuddeComm has attempted to provide estimates.
Market highlights:
- After surging by 400% in the 2008/2009 period, the East Timor mobile market grew by a third in 2010 and was continuing at a similar pace in 2011;
- Mobile subscriber numbers had reached almost 450,000 and penetration was at 38% by the end of 2010;
- In sharp contrast with the mobile market, both fixed-line subscriptions and Internet usage in its various forms remained especially low, with only modest growth likely in the short term;
- On the broader national front, however, the country’s history of political and civil unrest continued to cast a cloud over the nation’s development coming into 2011;
- Indeed, it was proving a major distraction for government, putting a serious damper on development programs and infrastructure building.
- The country ranked number 23 in the world on the 2011 Index of Failed States, not a very promising statement on the national development.
Note: Coverage provided of East Timor’s telecoms market is relatively limited due to its early development stage.
East Timor – key telecom parameters – 2010 - 2011
Category
| 2010
| 2011 (e)
|
|---|
Fixed-line services:
|
|---|
Total number of subscribers1
| 2,600
| 2,700
|
Annual growth
| 4%
| 4%
|
Fixed-line penetration (population)
| 0.2%
| 0.2%
|
Fixed-line penetration (household)
| 1%
| 1%
|
Internet:
|
|---|
Total number of subscribers1
| 900
| 1,000
|
Annual growth
| 12%
| 10%
|
Internet subscriber penetration (population)
| 0.08%
| 0.08%
|
Internet subscriber penetration (household)
| 0.4%
| 0.4%
|
Mobile services:
|
|---|
Total number of subscribers
| 442,500
| 600,000
|
Annual growth
| 34%
| 36%
|
Mobile penetration (population)
| 38%
| 50%
|
(Source: BuddeComm)
Note: 1Estimates for both 2010 and 2011
This report provides an overview of the trends and developments in the telecommunications markets in Timor Leste. Subjects covered include:
- Key statistics;
- Market and industry overviews;
- Regulatory environment;
- Infrastructure;
- Mobile market;
- Internet market.
