Belarus’s government and telecom regulator have in place three five-year programs aimed at developing the telecom sector and digital economy. Considerable progress has been made as these programs, which run to 2020, approach the half-way stage. In particular, efforts have concentrated on enabling the mobile network operators to trial 5G services during the first half of 2019, while laying more than 10,000km of fibre cabling. By August 2018 almost two million GPON connections had been made as part of the programs.
These programs were initiated while the country experienced declining economic growth (in 2015 and 2016) and formed part of wider efforts to develop growth through promoting the digital economy. Growth returned in 2017 and 2018, while inflation has been brought under control (2011 was reported as hyper-inflationary). The fall of the Belarusian Ruble in relation to other currencies, including the Euro, prompted the government to re-denominate the currency in July 2016, with BYR10,000 becoming BYN1. The poorly performing economy impacted on operator revenue, particular for the subsidiaries of Turkcell and Telecom Austria. These economic difficulties also reduced customer spend, contributing to lower revenue and investment.
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. This will better position the company to offer a range of bundled services. 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 launched by MNOs. beCloud is also charged with developing the network infrastructure to support 5G services.
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.
Beltelecom, Cosmos TV, Minsk TV and Information Networks (MTIS), Teleradio, Belcel, MDC, MTS Belarus, BeST.
Number of pages 41
Last updated 8 Oct 2018
Analyst: Henry Lancaster
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