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Latvia Telecommunications Report 2011
Business Monitor International, Jan 2011, Pages: 83
Latvia Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Latvia's telecommunications industry.
BMI’s 2011 report on Latvia’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 of 2015.Our new forecasts reflect Q310 data published by Latvia’s fixed-line incumbent operator Lattelecom, as well as the country’s three mobile operators, Latvijas Mobilais Telefons (LMT), in which Nordic carrier TeliaSonera has a major interest; privately-owned Bité Latvija; and Tele2 Latvia, the Latvian arm of Swedish carrier Tele2 AB.
In the Latvian mobile market, data from the country’s three wireless operators shows that the number of cellular subscribers fell by 5.6% in the first nine months of 2010. This was a notable change from the flat growth seen in 2009. BMI believes that the acceleration in subscriber uptake in 2010 was due to the improvement in Latvia’s economy which boosted consumer confidence and promotional activities introduced by operators to attract new customers. Based on trends witnessed in the nine months to September 2010, we estimate that the Latvian mobile market expanded by 6.4% for the year as a whole,taking the mobile penetration rate to around 116.6%. We anticipate an average annual growth of 1.5%over our forecast period. By the end of 2015, we predict the Latvian mobile market will have around2.8mn, reflecting a penetration rate of 130%.
Evidence suggests that 3G customer growth has been strong in recent months, with mobile data services emerging as an important alternative to fixed broadband services. We estimate the 3G subscribers accounted for around 22.1% of the total mobile customer base at the end of 2010. We predict this figure will rise to almost 60% by the end of 2015. The increasing availability and affordability of 3G compatible devices, including smart phones and tablet computers, will be a major driver of 3G growth in Latvia.One consequence of the impressive growth in the number of mobile broadband customers has been a slowdown in the demand for DSL services. In 2009, the number of Lattelecom DSL customers grew by just 7.7% to 194,000. The incumbent reported more robust growth in 2010 with its broadband subscriber base expanding by 12.9% in the nine months to September. Besides the recovery of Latvia’s economy from the recession in 2009, BMI believes the growing popularity of multi play offerings from the Lattelecom has been a key growth driver for fixed broadband subscriptions. Faced with increased competition, mobile operators in the internet access market, established wireline operators such as Lattelecom, Baltkom and IZZI are responding with investment into new high-speed broadband infrastructure.
By the end of 2015, we forecast a market of about 685,000 non-mobile broadband subscriptions, which is equivalent to nearly a third of Latvia’s population. Investment in higher speed fibre and cable services should help to keep the demand for fixed broadband services fairly buoyant over the next five years.
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