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Lithuania Telecommunications Report 2011
Business Monitor International, Jan 2011, Pages: 94
Lithuania Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Lithuania's telecommunications industry.
2011 report on Lithuania’s telecoms market contains updated and extended forecasts that predict how the country’s fixed-line, internet, broadband and mobile sectors will develop through to the end of2015. Our new forecasts reflect Q310 data published by Lithuania’s fixed-line incumbent operator TEOLT as well as Q310 data for the country’s three mobile operators, Omnitel (which is wholly owned byNordic carrier TeliaSonera), privately owned Bité Lithuania and Tele2 Lithuania, the Lithuanian armof Swedish carrier Tele2 AB. Our report also incorporates data published by Lithuania’s telecomsregulator, the Communications Regulatory Authority of the Republic of Lithuania (RRT). The latestregulatory data relates to the end of H110.
According to data published by the RRT and Lithuania’s three mobile network operators, the country’s mobile customer base shrank by 2.7% in the first half of 2010. The shrinking customer base is understoodto reflect the deduction of inactive prepaid customers from the network operators’ reported totals. BMIestimates that Lithuania’s mobile subscriber base shrank by 3.8% in the 12 months ending December2010. By the end of the year, the country had a total of 4.77mn mobile customers representing apenetration rate of 144.6%.
We expect Lithuania’s mobile operators to continue with their strategy of migrating prepaid customers over onto postpaid contracts. However, the operators also recognise the importance of serving the prepaidsegment with innovative prices and services. Meanwhile, in a bid to stabilise or even raise ARPU levels,operators such as Omnitel and Bité have sought to promote and expand their mobile data and internetofferings. In June 2010, Bité revealed plans to increase the number of 3G base stations on its network by45%, in a bid to boost mobile broadband coverage by 40% by the end of 2010. Meanwhile, in October2010, Omnitel announced that it had expanded its HSPA wireless network to 14 towns and cities in thefirst nine months of 2010. By the end of the year, the company planned to launch 3.5G services in afurther 40 new locations through the deployment of 100 base station transceivers (BTSs); this would havebrought total coverage to 250 towns and cities.
The latest regulatory data suggest that there were nearly 519,000 active 3G (UMTS) subscribers in Lithuania as of June 2010. This figure was up from just over 460,000 at the start of the year. We nowestimate that there were around 574,000 3G customers at the end of 2010 (representing approximately12% of the mobile subscriber base). Over the next five years, we continue to envisage strong and steadygrowth in the number of 3G customers.
The next five years will also bring strong growth in the number of mobile broadband connections. In 2010, we estimate that Lithuania’s broadband subscriber base expanded by 8.2% to reach 859,000. Thiswas equivalent to a penetration rate of 26%. We predict that optical fibre will continue to drive much ofthe growth in the Lithuania’s fixed broadband sector. The ongoing deployment of (fibre to the home)FTTH and (fibre to the building) FTTB services will result in the continuation of negative growth in theDSL and cable segments. However, it is within the mobile broadband sector that the greatest subscribergrowth is anticipated for the duration of our forecast period. Regulatory data show that mobile broadbandconnections based on USB sticks and other mobile devices were the main drivers behind Lithuanianbroadband market growth in 2009 and H110. The number of mobile broadband connections grew by38.1% in 2009 and by a further 9.1% in H110. By the end of June 2010, such customers numbered nearly175,000 and accounted for over 21% of all Lithuanian broadband connections.
Finally, we estimate that there were just less than 746,000 fixed telephony lines in service at the end of 2010, down by 0.2% year-on-year (y-o-y).This gave Lithuania a fixed-line penetration rate of 22.6%,unchanged on the previous year. Going forward, our new fixed-line forecast for Lithuania envisages aperiod of sustained decline over the next five years. Lithuania has one of the lowest fixed-line penetrationrates in CEE. BMI believes that this is the main reason why market growth remained buoyant comparedwith other markets in the region.
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