Mobile market in Armenia undergoes major modernisation program

The Armenian telecom market continues to attempt to put an effective national telecommunications service in place. Armenia’s telecom sector was slow to capitalise on the country’s steadily improving economic conditions, however by 2018 there had been considerable improvement in both the economy and the country’s telecom market.

The number of fixed lines Armenia peaked in 2008 and since then has steadily fallen, driven by strong growth in the mobile broadband segment. This trend is predicted to continue over the next five years to 2023.

Fixed-line broadband market penetration has grown moderately over the last five years, with penetration increasing from a very small base. Over the next five years to 2023 growth is expected to continue to grow moderately.

Growth has been relatively flat in the mobile market over the past five years. Mobile subscriber growth is expected to remain fairly flat over the next five years to 2023.

Beeline Armenia has completed the large-scale mobile network modernisation program. The wide-scale project includes the upgrade of existing infrastructure, to decommission outdated analogue equipment, and the deployment of new optical fibre networks.

Mobile broadband subscribers have grown very strongly over the past five years. Strong growth is predicted over the next five years to 2023. The mobile broadband market will be driven by increasingly faster speeds offered by the mobile operators as they roll out their 4G networks and falling prices due to growing competition.

The Armenian government stated that Nokia could be the company selected to participate in a project designed to ensure the country can roll out a nationwide 5G network.

The Armenian government approved plans to build a new data center. The data center is to be built via a public-private partnership. The government is to provide the premises and infrastructure, and the rest handled by a private investor.

BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key developments:

• The fixed broadband has grown strongly over past decade from a small base but still remains low by international comparisons.
• Beeline Armenia introduced its new colocation service to corporate subscribers.
• Growth has been relatively flat in the mobile market over the past five years.
• Strong growth is predicted over the next five years to 2023 in the mobile broadband market.
• The Armenian government approved plans to build a new data center.
• Assessment of the global impact of COVID-19 on the telecoms sector.

Companies mentioned in this report

ArmenTel, VEON ArmenTel (Beeline), Orange, Orange Armenia, Ucom, VivaCell-MTS, MTS, Sistema, VimpelCom.