Last updated: 1 Jun 2010 Update History
Report Status: Archived
Report Pages: 55
Analyst: Henry Lancaster
Publication Overview
This report covers trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including VoIP and IPTV developments. Subjects include:
Researcher:- Paul Kwon
Current publication date:- May 2010 (9th Edition)
Next publication date:- April 2011
Executive Summary
Since independence Lithuania embraced market reform and joined the European Union overseeing rapid economic growth characterised by large real wage increases driven by declining unemployment and emigration, EU sourced development funds and extremely rapid credit growth. Like its Baltic neighbours to the north the global financial turmoil brought a sudden end to Lithuania’s boom, with eight years of consistent annual growth giving way to 14.8% real GDP contraction in 2009, with EU estimates of a further 0.6% contraction for 2010.
Lithuania’s telecoms market did not escape the effects of the economic downturn, contracting by 7.7% during 2009, smaller compared with the overall economy due to the utility nature of telecoms and communications services. Not all sectors of the communications market were affected equally; falls in revenue from fixed and mobile telephony were offset by increases from broadband, data transmission, leased line services and wholesale fibre access.
A number of alternative operators offer services in the liberalised fixed-telephony market although incumbent TEO is still the dominant operator. Fixed-line subscriber numbers are expected to continue trending downwards in 2010, attributed to fixed-to-mobile substitution, although fixed-line broadband services provides an incentive for consumers to hold onto fixed lines, which forms the basis of the incumbent’s future growth strategy.
Broadband accounts for 99% of all fixed Internet connections. Infrastructure-based competition has led FTTx to overtake ADSL to become the most popular fixed broadband access platform. Fibre is expected to represent a growing proportion of total fixed broadband subscriptions in 2010 due to the continued focus on fibre by both the private and public sector. With Internet access now commoditised, service providers have shifted focus to Internet-based convergence services such as broadband TV (IPTV) or bundled separate services to increase average revenue per user levels.
Widespread Internet usage has fostered Lithuania’s Internet society, the application of ICT to improve social and economic development, with various e-commerce, e-government, e-education and e-health initiatives underway and services available. A burgeoning digital TV market is evident due to the transition to digital-only broadcasting, with the telecoms incumbent well positioned for digital TV subscriber growth in 2010 due to its involvement in both IPTV and digital terrestrial TV.
Most Lithuanians possess a mobile phone and multiple SIM card ownership has pushed penetration levels beyond 100%. Services are offered by three mobile network operators and a number of mobile virtual network operators. Mobile broadband represents the next growth opportunity, building on past investments in 3G and HSDPA networks.
Lithuania key telecom parameters – 2009 - 2010
Sector |
2009 |
2010 (e) |
Broadband |
|
|
Fixed broadband subscribers(thousand) |
634 |
680 |
Fixed broadband penetration rate |
19% |
20% |
Mobile broadband penetration rate |
6% |
8% |
Subscribers to Telecoms Services |
|
|
Fixed-line telephone subscribers (thousand) |
747 |
710 |
Mobile phone subscribers (thousand) |
4,964 |
4,850 |
(Source: BuddeComm based on industry data and estimates)
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