Belarus experience strong economic growth during the first years of the century, though this stalled during the financial crisis of 2008 and 2010. In recent years growth has continued to fall sharply, including an estimated 2.7% drop in GDP for 2016. Belarus continues to feel the effects of economic difficulties experienced by its main trading partners Ukraine and Russia. Although inflation has been brought down to more manageable levels since the hyper-inflationary year of 2011, when inflation reached 109%; inflation since then remains high while the value of the rouble has fallen in relation to other currencies, including the Euro.. This prompted the government to re-denominate the currency in July 2016, with BYR10,000 becoming BYN1. The poorly performing economy has impacted on operator revenue, particular for the subsidiaries of Turkcell and Telecom Austria. The ongoing economic difficulties have also reduced customer spend, contributing to lower revenue and investment.
Nevertheless, there remain many opportunities for growth in coming years, particularly in the broadband segment where the incumbent telco Beltelecom is migrating its PSTN network to a fibre-based network, and so will be better positioned to offer bundled services. Although the sector has been reformed in recent years, restructuring has not yet resulted in the privatisation of the incumbent Beltelecom, which continues to invest in infrastructure and technologies. Although the government is keen to control these assets, there is greater pressure for it to sell state enterprises in a bid to reduce overall debt. Growth for Beltelecom is expected to be particularly strong in the FttP sector, where much of the company’s capex is directed.
The mobile sector has experienced the strongest growth in telecoms, with a rapid rise in mobile penetration attributed to effective competition. Operators have concentrated on developing mobile broadband and data services with a view to capitalising on such services to increase ARPU. Recent spectrum auctions have facilitated the development of mobile broadband access, particularly in rural areas, while the operator beCloud, charged with developing a wholesale-based LTE network, has enabled commercial LE services to be launched by MNOs, though at present services are largely restricted to Minsk and some of the larger cities.
In early 2015 the government decreed that the 1.5% tax on revenue derived from telcos (which was put in place in 2007) should be channelled to developing telecom universe services, particularly aimed at rural areas. In mid-2016 the cash-strapped government increased the tax on all telecoms services from 20% to 25%.
|Mobile SIM (population)||122.8%|
Beltelecom, Cosmos TV, Minsk TV and Information Networks (MTIS), Teleradio, Belcel, MDC, MTS Belarus, BeST.
Number of pages 38
Last updated 14 Nov 2016
Analyst: Henry Lancaster
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