Executive summary
Latvia’s leading broadband infrastructure supported by EC funding for fibre network
BuddeComm’s annual publication, Latvia - Telecoms, IP Networks and Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecoms market in on one the more progressive Baltic states. It incorporates the regulator’s market data to 2011, telcos’ operating and financial data to June 2012, and market developments to mid-2012. The report provides an overview of the telecoms market including the mobile voice and data, broadband and digital media sectors.
Latvia’s telecom market has been shaped by the EU’s 2002 regulatory policies and the revised 2009 New Regulatory Framework. The country is also a member of the Economic and Monetary Union of the EU, but it is not expected to introduce the euro until 2014 at the earliest.
Although Latvia’s economy showed considerable growth following independence from Russia, this was swiftly halted in 2008 as a result of the economic crash. Real GDP contracted almost 18% in 2009, the highest among the EU27 member nations. This improved in 2010, and by 2011 GDP growth reached about 5%, though this is expected to fall to about 2% for 2012. This cycle has had a profound effect on the telecoms market, with consumer confidence in the economy resulting in lower expenditure on telecom services. The incumbent, Lattelecom, as well as the main mobile network operators, has reported lower revenue since 2008, creating a knock-on effect in the ability to fund network upgrades. Nevertheless, in contrast to many other economic sectors, spending on telecom services will be buttressed by the utility nature of most services.
Latvia’s broadband market continues to suffer from inadequate progress on local loop unbundling, though the government has stepped up its efforts to build a national fibre broadband network, recently securing funding from the EC.
A healthy digital TV market is evident, with offerings available from established cable TV, satellite, digital terrestrial TV and broadband TV providers. Digital TV uptake is increasing rapidly, and although parallel analogue broadcasting exists, the switch to digital terrestrial TV was completed in mid-2010, many months earlier than originally scheduled.
Four GSM/CDMA/WCDMA mobile network operators vie for customers in a competitive market. LTE services have been launched commercially, while the recent auction of 2.6GHz spectrum will enable four players to use this band for LTE from 2014.
Key telecom parameters – 2010; 2012
Sector
| 2010
| 2012 (e)
|
|---|
Subscribers to telecoms services (thousand):
|
|---|
Fixed-line telephony
| 552
| 500
|
Fixed broadband
| 450
| 560
|
Mobile
| 2,340
| 2,320
|
Penetration of telecoms services:
|
|---|
Fixed-line telephony
| 25.7%
| 24.7%
|
Fixed broadband
| 22%
| 29%
|
Mobile SIM (population)
| 103%
| 102%
|
(Source: BuddeComm)
Market highlights:
- Fibre rollouts are dominated by Lattelecom, which offers up to 500Mb/s access. A small number of operators offer services in greenfield sites and in some urban areas. Recent regulatory measures are aimed at facilitating access to the national broadband network.
- Digital TV uptake has accelerated, with satellite and cable TV dominating digital access. Analogue switch-off was completed in mid-2010, and has thus released spectrum in the 800MHz band for use in mobile services.
- Increasing competition in the mobile broadband market is evident as all four mobile networks offer generous amounts of bundled data. The challenge for mobile operators in coming years will be maintaining service levels across networks under heavy traffic loads.
- Limited LTE services were launched in 2011, and have since been extended. Following the auction of spectrum in the 2.6GHz band, these frequencies will be made available to the four licensees from early 2014. National coverage of LTE from LMT in the 1800MHz band should be reached by the end of 2012.
- The EC’s approval of funding for fibre networks supports the government’ own programme to build a national network, to be largely completed by the end of 2013.
- The regulator’s award of 2.3GHz spectrum to LMT and Bité in October 2012 will go some way to further developing the mobile data market.
Henry Lancaster
November 2012
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 Latvia’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;
- Internet, IPTV;
- Mobile voice and data markets;
- Broadband (FttH, DSL, cable TV, wireless);
- Convergence and Digital Media;
- Broadband market forecasts for selective years to 2020.
Key developments:
Deutsche Telekom signs agreement with Lattelecom to deploy the Baltic Telecommunications Highway; government secures key EC financial backing for national fibre network; auction of 2.6GHz spectrum paves the way for 4G mobile broadband expansion from 2014; 1800MHz LTE coverage expected by end-2012; regulator’s market report for 2011, telcos’ operating and financial data to Q3 2012; market developments to November 2012.
Companies covered in this report include:
Lattelecom, Baltkom TV, Izzi, Viasat, Latvia Mobilais Telefons, Bité, Telekom Baltija, Zetcom, Tele2, Latvenergo.
This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Latvia. 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;
- 3G developments, regulatory issues and technologies including HSPA and LTE;
- Broadband migration to an FttH architecture;
- Historical and current subscriber statistics and forecasts;
- ARPU statistics and forecasts.
