2013 Estonia - Telecoms, IP Networks, Digital Media and Forecasts

Strong investment in LTE resulting in huge mobile broadband growth

BuddeComm’s annual publication, Estonia - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media sectors of one of Europe’s smaller and most innovative markets. The report includes operator data to end-2012; Statistics Estonia data to end-2011 and 2012 updates; regulator’s 2011 market data report; ETSA’s 2012 annual report; market developments to April 2013.

Economic background

The Estonian economy has undergone two sets of reforms in recent years. The main objectives of economic reform were reducing inflation, establishing stability in the country’s exchange rate and securing international investment. The economy showed considerable growth through the 1990s and into the new century, with GDP growth reaching 10.6% in 2006. However, GDP contracted by 5.1% in 2008 and 13.9% in 2009, mainly due to the collapse in demand for exported goods. However, a second tranch of regulatory measures and fiscal tightening since 2008 led to solid economic recovery, with GDP growth of 7.6% in 2011, though this was expected to have fallen to 2.4% for 2012. At the beginning of 2011 the country adopted the troubled Euro (€) as its currency.

Telecom market overview

The Estonian telecoms market is one of the most developed in Eastern Europe, having been one of the first in the region to be open to competition. The broadband sector has one of the highest penetration levels in the region, with widespread broadband usage underpinning the emerging internet economy. Various e-commerce, e-government, e-education and e-health services are available and widely used. The country was the first in the world to enable citizens to vote using Mobiil-ID cards. The cable-TV market is well developed and hence CATV operators have been well-positioned to offer bundled services.

Mobile market

Mobile penetration is on a par with most Western European countries, and though the three MNOs offer effective competition the MVNO market is underdeveloped. The mature 3G networks have promoted strong growth in the use of mobile data services, which will develop further in coming years as MNOs concentrate their investment in LTE upgrades. National LTE network coverage is expected by the end of 2014.

Key telecom parameters – 2010; 2013

(Source: BuddeComm)

Market Highlights

• Operators have been able to deploy LTE more cost-effectively in rural areas since Russia made available the 790-862MHz band that had previously been used by military air controllers.
• EMT now has more than 50% of new mobile data subscribers taking up LTE services, compared to between 10% and 15% of new accesses in early 2012.
• The government’s support of a nationwide 100Mb/s FttX should deliver 100Mb/s services nationally by 2015. The State’s contribution to the project in rural and underserved areas is proportionately among the more significant in the EU.
• The gradual deployment of fibre has contributed to the steady decline in the number of DSL and cable broadband subscribers since 2011.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Estonia. 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.

Data in this report is the latest available at the time of preparation and may not be for the current year.