IHS Global Insight Perspective | |
Significance | The launch of Moldtelecom's 3G network is hoped to boost competition levels in the growing mobile market. This is the third such launch in Moldova. |
Implications | Moldtelecom has been hit hard by the global economic downturn, but it plans to drive recovery through substantial investments in new service offerings. |
Outlook | Mobile penetration in the country is estimated to be around 80%. Meanwhile, 3G services continue to be targeted at a small niche of higher end-users. |
Moldtelecom has announced the launch of its 3G mobile network in Moldova, offering mobile broadband services across the country. The incumbent operator's CEO, Vitalie Iurcu, said the network is now live, following initial plans to launch a 3G network in late 2009. That launch was delayed.
Fixed-line giant Moldtelecom currently provides mobile services in the CDMA standard, and obtained a licence to provide 3G mobile services in late 2008. Besides Moldtelecom, leading mobile operator Orange Moldova and key rival Moldcell also provide 3G mobile services, having launched their own 3G networks in the second half of 2008.
Outlook and Implications
- A Boost to Competition in the Moldovan Mobile Market: The launch of Moldtelecom's 3G network, the third such launch in Moldova, is hoped to boost competition levels in the growing mobile market. Penetration in the country is estimated by IHS Global Insight to have been around 80% at the end of 2009, indicating that there is room for further growth, but 3G services continue to be targeted at a small niche of higher end-users. France Telecom's Orange Moldova is comfortably the leader in the mobile market with a share of more than 65%, benefiting from the backing of a major foreign player, and recently upgraded its 3G download speed from 10 Mbps to 21 Mbps (see Moldova: 23 December 2009: Orange Moldova Improves Mobile Broadband Speeds). Orange estimates some 50,000 subscribers to its "Internet Acum" 3G service, a year after launch, with its 3G network covering 70% of the population, and has revealed plans to introduce new services in the Moldovan market. Meanwhile, Scandinavian giant TeliaSonera has indicated that it will direct US$14 million towards the network development at its Moldovan unit, Moldcell, the second-largest mobile operator in the country (see Moldova: 23 February 2010: TeliaSonera Pledges US$14-mil. Investment in Moldcell's Infrastructure Development in 2010). Moldcell currently boasts an estimated market share of around 30%, placing it well behind market leader Orange but well ahead of newcomer Eventis, which had barely 1% at the end of 2009.
- Moldtelecom Increases Network Investment: Moldtelecom's 2009 revenues dropped 9% on the year to 2.4 billion lei (US$191.8 million), but the fixed-line incumbent managed to boost net profit by 3%, as the group streamlined costs, reducing total expenditure by 11% (see Moldova: 15 March 2010: Moldtelecom Reports 11% Revenue Decrease in 2009 Despite Broadband Subscriber Gain). Along with the majority of other operators in its region, Moldtelecom has been hit by the global economic downturn, but it plans to drive recovery through substantial investments in new service offerings. In 2009 alone, the operator directed 139.5 million lei towards information technology services, 109.8 million lei towards fibre-optic cables to support increased capacity demands, 156.0 million lei towards 3G network construction, and 55 million lei towards IP TV network construction (see Moldova: 24 February 2010: Moldtelecom Launches IP TV).
- Threat of Fresh Fixed-Line Regulation: Although the award of 3G licences is likely to improve competition in the mobile sector, the fixed-line sector is less competitive, with Moldtelecom holding a subscriber market share of more than 97% and an estimated 72% share of the growing broadband market. The Moldovan telecoms regulator has recently announced the launch of a public consultation into the fixed-line market dominance of Moldtelecom, in particular examining the market for call termination and origination on its network (see Moldova: 5 April 2010: Moldovan Regulator Looks to Increase Market Competition with Regulation of Key Broadband Markets). The regulator is also looking at enabling easier access for rivals to the incumbent's infrastructure, increasing competition in the market of service provision to end-users.