Executive summary
Moldovan incumbent new network access provisions promote ICT sector
Moldova enjoyed consistent economic growth between 2000 and 2009 when the effects of the global economic turmoil contributed to a fall in GDP of between 6% and 9%. Following assistance from the International Monetary Foundation (IMF) in early 2010, the economy has since recovered, showing a 6.9% growth in 2010 and a projected 4.5% growth for 2011.
These tough economic conditions have not been mirrored in the telecoms market, which has weathered recent turmoil better than other market sectors, in part because the sector remains relatively under-developed with considerable room for growth in coming years. 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. This has led to a much needed injection of funding, including about €300 million in aid to 2006 and an additional €230 million to 2010, as well as some €900,000 in support from the European Bank for Reconstruction and Redevelopment to develop ICT and bring the country’s standards closer to those demanded from the EU. Market liberalisation has led to a raid increase in the number of operators licensed to provide telecoms services, from 45 in 2008 to 168 by the beginning of 2011.
Moldova’s internet market is also developing rapidly, though relatively underdeveloped competition and low penetration levels still present considerable opportunities 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 47 ISPs nationally. The overall number of broadband subscribers exceeded 450,000 by mid-2011, including about 140,000 mobile broadband subscribers.
The mobile market has grown rapidly and 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 though this will not be mirrored in revenue growth, which amounted to only about 5% in the first half of 2011. In mid-2011 the country’s smallest mobile operator Moldtelecom, operating under the Unite brand, launched 3G services (as Unite 3G). The network covers about two-thirds of the population, including all major cities and regional centres and many rural regions.
Moldova broadband and telecoms statistics – 2010; 2012
Sector
| 2010
| 2012
|
|---|
Telecom services penetration
|
|---|
Fixed broadband
| 7%
| 12%
|
Fixed telephony
| 32%
| 35%
|
Mobile telephony
| 88%
| 103%
|
Subscribers to telecoms services (thousand)
|
|---|
Fixed-line telephone subscribers
| 1,160
| 1,220
|
Mobile phone subscribers
| 3,165
| 3,750
|
Fixed broadband subscribers
| 293
| 375
|
(Source: BuddeComm based on industry data)
Market highlights:
- The uncompetitive fixed telephony market should receive a boost by 2013 with the introduction of number portability, enabling customers to retain their phone numbers while switching to another provider within five days. NP in the mobile sector will also have an effect on churn and so encourage operators to provide improved services.
- Broadband penetration, approaching 9% by mid-2011, is largely focussed on emerging FttX networks driven by consumer demand for new services such as IPTV. With the number of subscribers having increased 37% in the first half of 2011, the 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.
Henry Lancaster
September 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 Moldova’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 data;
- Broadband market forecasts for selective years to 2020.
