Virus impact over each market - telecom operators, government agencies and regulators' responses - revised forecasts for the next 5 years.
Belarus’s government and telecom regulator are concluding three major programs aimed at developing the telecom sector and digital economy. Considerable progress has been made, in particular enabling the mobile network operators to trial 5G services and extending the reach of fibre infrastructure.
These programs were initiated in 2015 and 2016 while the country experienced declining economic growth and formed part of wider efforts to develop the economy through promoting the digital economy and developing the ICT sector. Such considerations have also encompassed a growing interest in applications relevant for smart cities.
Following the political turmoil of mid-2020 the local currency has depreciated against the US dollar and the euro, and this has placed greater strain on operator revenue.
Although the sector has been reformed, this has not yet resulted in the privatisation of the incumbent, despite the government being pressed to sell state enterprises in a bid to reduce overall debt. Revenue growth for Beltelecom is expected to come from the FttP sector, where much of the company’s capex is directed.
The mobile sector has also experienced some growth, with a rise in mobile penetration attributed to effective competition which has helped drive down consumer prices. 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 state-sponsored operator beCloud, charged with developing a wholesale-based LTE network, has enabled commercial LTE services to be extended to about 80% of the population. beCloud is also charged with developing the network infrastructure to support 5G services. It is undergoing the process using spectrum in three bands.
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 universal telecom services, particularly aimed at rural areas. In mid-2016 the cash-strapped government increased the tax on all telecom services from 20% to 25%, while a ‘Google tax’ was imposed from the beginning of 2018.
BuddeComm notes that the Coronavirus pandemic 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.
Beltelecom, Cosmos TV, Minsk TV and Information Networks (MTIS), Teleradio, Belcel, A1 Belarus (MDC), MTS Belarus, BeST life:)
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Gary Sorkin, Pacific Communication Group
BuddeComm's strategic business reports contain a combination of both primary and secondary research statistics, analyses written by our senior analysts supported by a network of experts, industry contacts and researchers from around the world as well as our own scenario forecasts.
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